People often ask me what patterns or themes I've noticed in founders through my executive coaching practice. Obviously there's a ton of variation based on where the client is in their business and life stage, but over time, I've noticed a trifecta of challenges that confront many startup founders who have raised money and are 1-2 years in.
You might call this the early stage crucible.
1. Lack of Product-Market Fit
PMF is an elusive concept—the idea that you've found the perfect product and just need to scale is oversimplified. Product-market fit comes and goes as you expand customer segments and enter new product categories. Despite its imprecision, it's easy to tell when a startup doesn't have it:
- It's hard to reach people interested in your product.
- For consumer this might mean low CTR, traffic, and sign up rates
- For B2B this might mean poor response rates to outbound messages
- The product isn't valuable, sticky, or solving a major pain point
- Consumer: users don't retain or refer / invite new users
- B2B: prospects ghost, demand steep discounts, churn easily
After the initial optimism of fundraising and early product launches subside, this lack of PMF starts to get worrying. Founders typically face two choices: change the product or target a different market. Some get stuck in "pivot hell," constantly changing ideas without conviction, while others make a pivot that feels like stepping backwards.
2. Team Conflict
The lack of PMF can often lead to founders disagreeing more over the direction of the company, allocation of resources, their respective roles and responsibilities, and just general annoyance with the other's working style. The co-founder relationship is incredibly intense—like a couple married with kids, you are bound to this other person and have joint custody of entities you're responsible for yet can't totally control.
Sometimes conflicts extend to essential team members whose unique expertise or influence makes them challenging to replace, requiring careful negotiation to resolve issues. Ultimately, what might start as healthy debate—important for any team—can spiral into deeper rifts, especially when the pressure of poor market traction amplifies every disagreement.
3. Personal Doubt and Burnout
Conviction is the most powerful asset a founder can have. With unwavering belief in your mission, you can rally your team, secure resources, and chart a clear path forward. But during the early days, founders often find themselves tangled in personal challenges that can shake their confidence to the core.
They're pushing themselves at an unsustainable pace while financial pressures keep them tossing and turning at night, and tomorrow feels like one big question mark. Many struggle to define their leadership identity while that persistent voice of imposter syndrome whispers "you aren't really cut out for this."
The comparison trap makes it even worse - scrolling through LinkedIn, seeing carefully curated success stories that make it seem like everyone else has it all figured out. It's enough to make even the most determined founder question their entrepreneurial journey.
Getting out of the Crucible
This creates a downward spiral as these challenges amplify each other: market setbacks spark tension with co-founders, triggering self-doubt, which clouds decision-making. So how do you get out of the crucible?
Well if I knew the exact answer, I'd be worth at least 10x more than I am now! The reality is that the best advice and support is idiosyncratic, but here are a few threads to pull on:
- Figure out how to get closer to users: a lot of founders enter a market that looks promising or where a new technological innovation would be valuable, but don't have deep relationships with potential customers. This creates challenges for them in not just going to market, but designing and positioning a solution that actually fits into the customer's workflow and worldview. And if you can't reach these users to understand them, you're definitely not going to have an easy time selling to them.
- Narrow down: relatedly, you probably would do better to tailor your solution to a very thin slice of the market. Often it's not enough to be "mostly right". You need to make a solution that "just works" and is 10x better than the competition. That's often only possible by taking a more popular solution and optimizing the F out of the 10% of features that this specific segment most needs, and selling just that to them.
- Seek founder-market fit: another way to look at this is that founders should pursue ideas where you have natural advantages, whether from your work experience, network connections, or unique background. These built-in strengths give you a head start and deeper understanding of the problem you're trying to solve.
- Reset your expectations: there's no reason to believe that starting a company should be easy or trouble-free. Y Combinator only selects among the top 1.5-3% of applicants, and even then, only around 15-25% of them have exited or gone public 7 years after YC, while 30-35% of them are inactive and the rest are still running. So expect hardship, expect conflict, expect setbacks—and this paradoxically will make those things easier to endure and not have an existential crises over. They are not signals your company won't make it.
- Get professional help: come on, as an exec coach you didn't think I wasn't going to bring this up right? But seriously, working with a coach, therapist, or advisor can provide invaluable perspective when you're in the thick of it. They can help you see blind spots in your decision making, process tough feelings or team conflict in a healthy way, and keep you accountable on your journey out of the crucible.
The early stage crucible is intense, but it's also where the strongest companies are forged. The founders who make it through often look back and realize these challenges weren't roadblocks, they were the road itself. Every pivot, every team conflict, every moment of doubt became part of their company's DNA.
The question isn't whether you'll encounter challenges along the way, it's how you respond when you inevitably do, And sometimes, just knowing you're not alone in the crucible can make all the difference.
