The number 1 growth killer is leadership debt

It's hard to create a startup, but it's even harder to scale a startup. 90% of all startups fail and only 0.6% of all startups cross the $10 million revenue threshold. Given the current tech rout, we can expect that number to drop even further.

The founders seem to think not. 1 reason for startup failure was running out of money. In my experience as a growth capital investor, lack of liquidity is not a reason for failure, but a consequence of failure. . This is the consequence of founders' inability to develop strong leadership skills, transition from founder to leader, and build a strong management team. If you want to take your business from initial traction to high and sustainable growth, you need to start developing your leadership skills now. The longer you wait, the more leadership debt you incur and the more likely your startup won't go through the valley of death.

Leadership debt is usually incurred during the inception phase of a startup

In the early stage of a startup, founders typically focus all of their efforts on execution. They form a small team. They build the product. They invest in marketing and sales and generate their first income. They make all the important decisions themselves. But they don't use the initial phase to develop their leadership skills. They incur a "leadership debt".

In the growth phase, the debt of the leaders can no longer be repaid

The situation is totally different in the growth phase. Suddenly the company has grown from 20 to over 100 employees who can be scattered across offices, countries and even continents. In the growth phase, founders can no longer focus solely on execution. They cannot make all the decisions themselves, but must delegate 90% of all decisions to a strong management team. They are suddenly in charge of the people running the business. Unfortunately, becoming a strong leader who can attract, retain and lead a strong management team is not something that can be learned overnight. It takes time and constant effort. By the time founders realize they need to transition from founder to leader, it's often already too late. They cannot repay the leadership debt incurred. Leadership debt incurred leads to bad decisions which, in turn, lead to business failure.

It is possible to avoid incurring leadership debt

You can avoid incurring too much leadership debt.

1. Assume your leadership debt. If a company fails, there is no one to blame but the leader. If you want to succeed, take on your leadership debt. Work on your leadership skills and develop a strong management team early on.

2. Work on your leadership skills.Don't put off working on your leadership skills. Granted, there are always other things you can focus on. But ultimately, your success and the success of your business depends on your transition from founder to leader. Don't procrastinate! Law! Read books! Listen to audiobooks! Attend classes! Hire a coach! Ask for feedback, listen and improve! Every day.

3. Build a strong leadership team.If you have a dysfunctional leadership team, you have a dysfunctional organization. Therefore, start building a strong leadership team early on. A strong management team can make critical decisions themselves and helps you make good decisions. Make sure your leadership team isn't just a team of functional experts. They must be leaders themselves. Empower them and help them grow.

4. Pay attention to the symptoms of leadership debt. You won't be able to completely avoid incurring leadership debt. But you can minimize it and pay it back if you notice it early enough. Some symptoms of leadership debt are:

Team conflict and team members blame each other. Constructive team discussions in which team members share diverse viewpoints and give critical feedback (including including feedback from peers and upwards) are critical to your success. Be sure to create a culture of trust where team members are "tough...