The AI Coach
AI meets human behavior in these fun and insightful conversations with Danielle Gopen, a top founder coach and advisor, and Paul Fung, an experienced AI founder. We blend AI breakthroughs with real-world insights on business strategy, industry disruptions, leadership, and psychology while cutting through the hype to ask the hard questions.
This is for decision-makers like founders and business leaders who want to harness AI's potential thoughtfully, exploring both the technological edge and human elements that drive long-term success. Join us to challenge the status quo, navigate the shifting landscape of an AI-powered world, and get new information worth sharing.
The AI Coach
Balancing Authority, Ego, and Decision Making
Unravel the complexities of leadership within ambiguous authority structures. Learn proven methods for navigating decision-making, mitigating power struggles, and disagreeing productively whether you're the one "in charge" or not.
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Okay, so this week we've had a lot of conversations around being a founder, having a co-founder, leadership within a startup. How do you develop your leadership style, especially when there isn't clear authority in place Within a startup? There's a lot of ambiguity of authority, especially if you have a co founder. But even when you have a very flat team structure and people are more or less peers within the company, how do we think about that? And so I think today let's spend some time you know we'll do a little bit of the coaching side of things and then talk about working within a startup. Yeah, that sounds great.
Speaker 1:Yeah, I think I think authority has been, you know, as a founder it's. It's a tricky topic, right, Because you know you want to be and you are your peers with co founders. So I think there's there's actually multiple ways to kind of start a company and in in our company, we have decided to be peers and I think that's the best way, right. You kind of trust each other implicitly and you decide to have equal, say. Other people I've actually had founder friends tell me that the best way to do it is to make sure that one person has more authority than the other person. You know 51 49 split, which I think, which I think is tough. That's kind of like the concept of you know, asking someone to sign a prenup. It's like, well, you already expect something to go wrong and so you know you are giving one person more authority than the other person, which I think is a little bit challenging. So, yeah, let's dig into it, talking about kind of authority and responsibility and, I guess, influence within a startup.
Speaker 2:Well, so first I guess, influence within a startup. Well, so first I want to go back to the prenup comment, because I think this is interesting, the idea of equating equity split to the idea of a prenup. But either way, this idea of creating a structure that you say implies that you think something will go wrong. To me, I view as insurance or a way to talk about a hard thing in case something goes wrong, when you're in a place where things are still good, and so when you're at the place where things have already gone wrong, all of a sudden, it's very hard. You forget why you even started a business with that person in the first place. Why did you marry that person in the first place?
Speaker 2:Your head space is very different, and so I think the acknowledgement of reality, of not all partnerships are successful in the long run doesn't mean they're not successful in the short term for what they were, but they don't always last forever, and that's okay. What does that mean in planning for a worst case scenario? And so I do think there is something about, in a co-founder situation, a benefit to creating an equity framework that makes it very clear on what the authority breakdown is, and I don't mean authority in a harsh way, but just at the end of the day, who is the ultimate decision maker, the person who holds most more equity in the case where you don't have that, yes, how do you think about authority?
Speaker 1:Yeah, I think it's interesting and I should also caveat like I'm not like pro or anti like prenup, it's more just like the cultural kind of reaction to it oftentimes is someone to say like oh, I want you to set up a prenup, and then the other person says, oh, you like already expect this to go bad. I'm not making a statement on prenups, but maybe just kind of using it as an analogy, but anyway, to torture the analogy a little bit further. Yeah, sorry, go ahead.
Speaker 2:I'm a utilitarian at heart. It's always what's the utility in this, how to look at this from a utilitarian perspective. Emotion comes into it at some point, but my initial response is generally from a utility standpoint.
Speaker 1:From a utility standpoint, yeah, and I think that's a good way to look at it. I think what you mentioned, like it's insurance and it's planning for the worst case scenario, is like a very it's a very like rational thing to do in this situation. I think that so, getting back to startups, instead of prenups, so most people not most people, I would say a lot of people go into startups, choosing to do even equity splits, and it's especially tough in a two founders situation, right, because some people you know some founders will say like it's great to have three co founders because there's always a tiebreak, right. It kind of enforces that if you're going to make a major decision and actually my co-founder and I have kind of agreed to this early days we said if there's a major decision in the company, we both agree to it or we're not doing it. Right, if we're going to sell the company, we both agree to sell the company or not do it. If we're going to raise money, we're both going to be aligned with your co-founder. And I think that it's really important, when you have two co-founders to.
Speaker 1:One thing that we make sure we try to do and we try to put a concerted effort to do is to draw cleaner lines of responsibility.
Speaker 1:But a framework we've tried to adopt is to say, okay, here's my area of responsibility, here's your area of responsibility, right? Like I'm responsible for go-to-market, you're responsible for engineering. And if there is a disagreement in one of our areas of responsibility, we have kind of agreed to defer to the person who has the experience in that realm, right? So, for example, if there's some reason I have a disagreement about you know what we should do from an engineering standpoint, he gets to make the final call because that's his air responsibility. And I think that's kind of like a soft framework that we've used a little bit and it's gotten us far enough. But I think it can be really challenging, especially when it comes to conflict and disagreement and founder relationships of you know. Sometimes you get stuck between a rock and a hard place, and that's where you know you're a founder coach, right. That's where it can be really important to bring a third party you know into play, whether it's a coach or maybe a board member or, you know, maybe just a peer of the two of you.
Speaker 2:Yes, and I see that come up often when I am working with co founders. Generally it's I'm working with one of those co-founders on a one-to-one basis, but something will come up where there's co-founder tension or where there's a decision that they just can't agree on, and it's allowing me, as a third party, to be someone who's really objective. And even if I have a pre-existing relationship with one of the founders, it's being able to take a step back and look at things holistically and see okay, what's happening here? Where's the gap? Where are you two not seeing eye to eye on something? And I'm not in a position of authority to make the decisions for them. Ultimately, they still need to each stand in their own authority to get to a good decision.
Speaker 2:But having a facilitator in that conversation I think is super helpful, and a lot of times it's when we talk about authority. We said before about positional authority, this idea of a teacher and a student, manager and employee, some type of structure where it's clear who quote unquote has authority over the other in terms of an outcome, like a grade or a job or whatnot. And even in those situations that doesn't always mean that the structure creates the right dynamic and the right outcome. But at least there's more clarity on generally. The teacher says do your homework. The student says OK, me, not always. Actually that's a whole other side point. So I'm a big fan of managing up, which is counterintuitive to what you think of in positional authority. But I remember, even in high school, teachers giving homework assignments and me saying that assignment doesn't make sense, that assignment is not a good use of our time. No, I don't want to do that and going and basically negotiating with them on why that assignment didn't make sense. Some appreciated it, some did not. But I think taking that perspective of just because there's a certain positional authority in place doesn't mean that has to be the way things are done.
Speaker 2:That aside, going back to when I have co-founders who come to me, sometimes what I see happen is people get really clouded by what they think is happening in the company and they then attribute that to their co-founders.
Speaker 2:So there's one situation where co-founders had been together for a while I think four or five years at that point and historically one founder was more responsible for sales and then it just so happened that the other founder had had a couple of deals come up, just through the nature of meeting people and whatnot.
Speaker 2:They brought in a couple of deals to the company and they were pretty big size. And so all of a sudden that other co-founder felt like they were the salesperson and that whatever they said should be listened to and that they felt more authority in the company than what had previously been agreed upon and had been, the dynamic between the two and the co-founder that I was talking to felt really pushed out. And then they went back and ran the numbers and the reality was the person who had been responsible for sales to begin with actually still had a higher deal number than the other co-founder, but because this other co-founder's two deals were bigger in size than all the other smaller ones that had come together, they felt more powerful. With that, the dynamic between co-founders can really shift, based on each other's perception of the other.
Speaker 1:Yeah, I think that's totally true. It's so funny because I mean a couple of things there. One is I could totally see that happening. It hasn't happened with my co-founder and I, but I could see that happening with co-founders generally. And one kind of funny thing so we were just talking about before we started the pod today is founders are a self-selecting group of people who do not respect authority and are know-it-alls by nature, right, like we start a company largely because we believe we have something to offer the world or that we can do it better than someone else has done it, and so it's funny.
Speaker 1:I was actually thinking when you said it that you just don't adhere to positional authority. It is no coincidence that you are now an entrepreneur and founder of your own coaching business, right? That just makes a ton of sense to me, right? Of course, you wouldn't start your own thing because you felt you had something to offer the world, right? You're making me blush, but I think so. One is I think that with founders, it's especially challenging because not only do we have a lack of clearly drawn lines for who's manager and who's the employee, but we also have two or three or four, however many co-founders. There are people who all think they know better than the world and I think this is really challenging. So one thing I actually heard recently so my co-founder sends me, he listens to a lot of like YC podcasts and I think they've seen it all right and one thing that michael siebel was saying on one of them was that he thought that they functioned because they kind of on accident had different areas of responsibility. One was like a really strong back-end engineer, one was product, one was like sales and they didn't necessarily set out to do it that way, but that's just kind of like what ended up happening and his opinion on it was and not everyone agreed with him on the podcast, but his opinion on it was he thought that they functioned because even if other people disagreed with what other people were doing in the other people's respective areas, they didn't know enough about it to make a strong case for disagreement, so they weren't able to actually have any authority right. All that to say is it's much easier if you have different areas of responsibility.
Speaker 1:If you do cross the lines which often happens, I think, in the example that you gave you just have to look at the data, you have to look at the objective data and say like hey, you know, are you bringing in more sales than me? Because if you're not, then maybe actually we should try something else. And I think the other thing I would say is like one thing I've learned being a founder is founders have very strong egos. But to the extent that you can put egos aside and either choose to like, disagree and commit on something, so like hey, my co-founder has an idea, I disagree with this idea. You're almost always better taking action than doing nothing, right, at startups, you want to take action, gather data, experiment, get results, make some decisions based on that right.
Speaker 1:So, like what founders sometimes get stuck in? Is this like deadlock, disagreeing with their co-founder, when really the more productive thing to do would be for one of them to disagree and commit hey, I disagree with what we're doing, but I'm going to commit to what we're doing and have it produce data so that we can move forward. And so I think sometimes it's not about having authority and winning. Sometimes it's about understanding, you know, giving up your authority in order to move the business forward. Right.
Speaker 2:Yes, and you're bringing up a really key point about decisiveness. Something that I talk about with a lot of clients is the importance of decisiveness. Sometimes consensus will never happen, depending on how quote unquote controversial or difficult the decision is, and in that case I love what you're saying about sometimes being in a position of authority is being able to recognize your responsibility in contributing to making a decision, even if it's a decision you don't agree with. And I think as long as the founding team and the people working within a startup are on the same page about that philosophy, then you do reduce friction when it comes time to make difficult decisions and when it comes to a situation where the authority of one person versus the other might not be that clear, but the target of getting to a decision and of producing a certain outcome is in everybody's best interest.
Speaker 1:Yeah, I mean, one of my favorite frameworks on this is an Amazon framework, the type one, type two and there's a certain type of decisions that have kind of low consequence and so if you make that decision, you know it's changeable, essentially right. And so in those types of decisions, the best thing to do is always just to make any decision, actually flip a coin if you want to, right, because whatever happens, you will gather some data and then you can react to it and you can change that decision. And then there's another type of decision that has high consequences right, it's not very changeable. They're like permanent or semi-permanent decisions, and those ones you should take a lot of time, more time than you would think, to think about how you want to decide on that. And the reality is most of the decisions you make in the startup world are changeable, right, and it's funny because even ones that people think are the unchangeable ones the product we build is a changeable decision.
Speaker 2:The market, itself is a changeable decision.
Speaker 1:People, you know, think so hard and they get decision paralysis around what's our name going to be, what does it mean? What's our landing page? It's like all those things changeable, right, and you don't want to be changing them too often, of course, but people tend to overanalyze these things when really, what they should just be doing is putting something out there, make a decision, market to who you think is going to buy your product, build the thing that you think people and put it out there and gather that data and then go forward from there. Because you know most of the successful companies that we've seen, all these successful startups. They all have changed 100 times. They changed their ICP, they changed their product, they changed their branding, etc.
Speaker 2:I so agree with you and I just think about, even like, the logo changes of these companies that have very well-known branding recognition so Uber, google, facebook, instagram every couple of years, slightly different logo, slightly different branding. Was there a point in time where that founding team might have thought those things were unchangeable? Possibly Does it turn out that they are changeable? Yes, and I would say the big unchangeable things are probably more of selling a company. At what price will you sell it at?
Speaker 2:Based off the offer that you got, bringing a company public versus not, like things that, to your point, are hard to reverse. And yes, in those cases, they're not split-second decisions to be made and you are looking for a lot of information and input to make a decision there. And even then, I'm sure you can interview many founders who made a decision one way or the other and ask them, knowing what they know now, did they make the decision that they should have made? And they still might say no, I don't think I did, and that's okay, because we don't always know what the future will hold. We can just make decisions based off what we have at that time.
Speaker 1:Yeah, I mean, one thing that's funny is the first thing that comes to mind is that I kind of know, as an entrepreneur, as a founder, I'm going to be wrong more than I'm right. I kind of expect we're going to screw up a lot right Everything from I don't know who we sell to the initial product we build. And it's funny because I say that and if my investor listened they'd be like what do you mean? We back someone who's going to be wrong a lot. I think the key thing actually is to back someone who's comfortable being wrong a lot, who's okay being wrong and has a good process for finding their way to right.
Speaker 1:We'd all love to be the person who's right all the time and we all think we're the person who's right all the time, and the reality is, guess what? We're probably not the person who's right all the time. You know the profile of someone who knows how to take the data from those experiments, from those decisions that they've made, and find their way to right in some reasonable amount of time. Right, we don't have unlimited runway. So, yeah, I think you know people, founders often ego is such a big thing in starting a company. You read my mind.
Speaker 1:Again yeah, it's like it's such a hit to your ego if you are wrong, right and in some ways, your ego needs to be strong enough to say my ego isn't based on being right on this one small decision or on every single decision. My ego isn't based on being perfect. My ego, or my identity, is based more on like I am resourceful enough to be comfortable being wrong and to learn from those mistakes and then to fix those mistakes to ultimately build a product that people want and build a business that's useful for people.
Speaker 2:You captured that so beautifully and I really agree because, as we said earlier, most founders do have an ego. It's how you got to the place of being a founder and thinking that you can do something better than what's out there or bring something to the world that's important. At the same time, ego is the downfall of so many, and I love what you just said about how to channel ego and how to really think about it. And if you have a strong ego and you really believe in what you're doing, it is not about the minute along the way where you have to be proven right or wrong and your ego is impacted by that, but the end goal and end result of building what you believe in. And I love, love, love what you said about using your ego to know what you're capable of and to really believe in yourself, and that you will get to where you need to get to, as opposed to allowing your ego to diminish you and make you feel small in the times that you were wrong.
Speaker 1:Yeah, absolutely my co-founder, and I talk about ego quite a bit more than you would think, actually, because it can either be your biggest strength or your biggest downfall, right, depending on how you can harness it and how you're able to either let your ego control you or whether you're able to control your ego.
Speaker 2:So, from the founder's standpoint, what would you give as advice to other founders who might not have been able to fully capture this ego aspect yet? What's one thing that you think they should think about or do to help build this muscle?
Speaker 1:Yeah, I think one thing that I would say is I would advise people to just keep their ego in mind when they're making decisions and really think about like, is the decision I'm making the one I'm making because it's best for the business, or is it the decision I'm making because it's going to protect my ego? So let's go back to the example you gave right, where one co-founder was responsible for sales. The other co-founder had brought in some big sales right, and they got into a head-butting match about who should be responsible for sales. For the one who was responsible for sales, it's, of course, a blow to his ego that the other co-founder thinks he can do it better. That's a tough blow to your ego.
Speaker 1:But if they were bringing in big sales, there's also something to be said about like okay, well, what did you do to bring in those big sales? Is there something we should be doing that you, you know, did? Either you reached out to a certain type of customer or you used a certain type of relationship to bring in these big deals. And so you know that co founder who was really who was responsible for sales, and their ego was probably hurt or bruised by the other co founder coming in and stepping on their territory.
Speaker 1:If you put ego aside, you can say, oh, it's really great that you did that and actually it's helped the business and maybe opened up a new channel for us. So let's look at what you've done and put our egos aside and just try to learn from what's happened here to move the business forward in the best way possible. And so I think a lot of founders make a lot of ego-driven decisions and a lot of founders make a lot of ego-driven decisions, and a lot of founders will either choose to do something or not do something, based on whether their feelings are hurt or if they think their ego is hurt by their co-founder making a different decision. And so I think the main thing I would just say is just acknowledge that ego is a part of our decision-making and when you're making decisions, think to yourself am I making this because my ego is getting in the way of making the right decision, or is this truly the right decision for the business?
Speaker 2:So then, for that particular example, switch it around on you and say that the sales co founder wasn't experiencing an ego issue in the other person going and having good sales. They were excited about that. They felt like what's good for the goose is good for the gander. This is awesome, we're all here to build a great business. The flip side was the other co-founder, who had brought in the big deals, allowed ego inflation to happen and they went on a power trip and they started getting into all the decisions that were being made that weren't necessarily in their domain or had been decisions that they needed to make prior to that. It became much more micromanaged control. I now know what's best because I brought in these big customers, and so how do you think about that?
Speaker 1:Yeah, I mean that that the co-founder who went on the ego trip they have to be aware of the ego right're going on their power trip. They're letting their ego get the best of them, thinking like I know best, no matter what. And it turned out they were wrong when you looked at the objective data. The other co-founder had brought in more sales, and so I think that co-founder just needed to check their own ego and say, yeah, I did a couple of things right, but that doesn't mean I know everything right, like the other co-founders still had probably more experience doing sales, had probably tried a lot of different things before and ultimately was being more successful, and so, yeah, I think that that person needed to check their ego as well.
Speaker 2:And so then, going back to this idea of there being ambiguous authority between those two, how do you think that the other co-founder should have responded when their co-founder's ego got out of whack and like what is the right way for them to point that out to the other person or to bring that issue to the table?
Speaker 1:yeah, I think. I think it starts with like asking why? So when that person went on the ego trip, it's not necessarily that they thought they were better at sales, which it is ego trip. It's not necessarily that they thought they were better at sales which it is part of that but it also means that they thought that the sales co-founder was not doing enough at sales. Potentially right, they were not happy with that person's sales.
Speaker 1:And so if I was the sales co-founder, I would say hey, look, why are you unhappy with how sales are going right now? Right, and maybe that's I don't want to say coddling or catering to them a little bit, but there's something to unpack around. Hey, we've agreed on X sales goals. Maybe we haven't hit them. Here's what I've been doing. What's going on behind you, thinking you could do this better? Is there something that you think we haven't been trying, that you think we should be trying? And I do think the other co-founder has some say to say like. But I think, if they want to continue to work together productively, I think the sales co-founder can try to kind of peel back the onion. Are you unhappy with how sales are going?
Speaker 2:I've noticed that after you brought in these couple of deals, I'm feeling a bit more under the microscope. It takes a person who can put aside their ego to put that into the conversation, and so I think that is really a key point for founders out there, especially co-founders, to think about in how they handle these situations. Something else that I have a maybe controversial opinion on is that I really disagree with the idea of co-CEOs. In my mind, within a business, and if we do think about positional authority, the CEO has the ultimate decision-making power, and even if you're co-founders, if one's title is CEO and the other's title is CXO, something else, ultimately at the end of the day, the CEO makes the decision, and the other co-founders might not be happy with what that decision is, but that is the capacity of a CEO, and I'm curious what you think about that.
Speaker 1:Yeah, I mean. So one thing I also wanted to say before I answer, that I want to quickly add a little nuance to the thing I said before earlier and I think this came across. But I just want to make sure In the previous example, when we talk about the sales co-founder saying like, hey, are you unhappy with sales? I don't think they should necessarily. I think you would agree with me here. They shouldn't necessarily agree or give in that sales are going to correlate right, like sales might be going just fine. They should be comfortable enough in their position to say, hey, I'm willing to hear you out on what you have to say, even if I might not agree with you, right? So I think that's an important nuance I want to say because you shouldn't just let somebody's ego trip make you doubt yourself. I think that's one of the biggest you know downsides you could have is, like, as a founder, there's a million reasons you should doubt yourself and you have to kind of insulate yourself.
Speaker 2:I completely agree. I'll add to that to say that's I think the core of the issue here for a lot of co-founders is the gap between perception and reality, and so in that case, one person perceives that the other co-founder isn't living up to their role and responsibilities. The reality is that they are. So how do you close that gap? And I think being able to minimize ego for that conversation is key to it you know, my co-founder and I talk about this all the time.
Speaker 1:When we're not on the same page about something, it's very easy for one of us to we make up stories in our head just the same way that people do in romantic relationships or friendships or whatever it's like oh, and someone did this thing because of X, y, z, right, and in a business, that can really kill you when you're making up stories in your head about why someone's doing a certain thing or why they're not doing a certain thing. And so you know, transparency is almost always the best answer, especially when it comes to co-founders. To answer your other question about co-CEOs, I mean we don't see it that often, you know. I think Salesforce tried it, I think some interesting companies have tried it. I agree with you. I think there has to be somebody making a decision. At the end of the day, I think the only knows what decisions are within their realm and knows how and when to lean on other people within their organization whether it's their co-founders or whether it's their VP of engineering as to how to make a decision, and so I think that good CEOs, I think, are decisive.
Speaker 1:I think good CEOs also know speaking about ego. They don't let their ego get in the way to have them make decisions on areas of expertise that they are not the right person to make the decision on. So you might be the CEO, but if someone's asking you how to scale your database or whatever it is, unless you're a technical CEO, you should not be making that decision. You should be asking the right people for the inputs that are necessary for that decision. What are the cost benefit trade-offs, what's it going to cost us in terms of time, in terms of money, in terms of labor? And then we can make a decision based on that. So, yeah, I think I agree with you that there should be somebody making those key decisions at the end of the day, but there's an important line to draw on which decisions they choose to make unilaterally and which decisions they're trusting their team to say. Like you know what, I agree with whatever the VP of engineering says, because I trust the VP of engineering implicitly that they're going to make the right choice, spot on.
Speaker 2:And from what you're saying right now, what we've talked about so far, what I'm really taking away from this is the idea of titles create authority. The idea of equity split creates authority. And then the times where there's not that. How do you have relational authority with your co-founders and with your team? And I think that the ability to see other people's side of things and what you said not create stories in our heads of what we think is happening, but really ask questions and see the other person's side of it is so helpful for managing in every direction, or to, if not outright avoid, at least minimize and shorten the duration of these potentially contentious situations within a more flat structure.
Speaker 1:Yeah, something that we say a lot internally. My co-founder is be curious, right. So, like you know, when we're trying to find product market fit, we're curious about user needs. But you know, internally, when it comes to, you know, co-founder friction and things like that, you know if your co-founder is upset about something, it's the first reaction is to react right To like have this visceral reaction, or to get frustrated or upset or whatever it is.
Speaker 1:But a better reaction might be to say like oh, I wonder why my co-founder is upset about this thing, or I wonder why they feel this way, and to ask them outright like, hey, I noticed you're feeling a little bit frustrated. I noticed you think that you have a lot of opinions on sales. Now Can you tell me what's going on there? And I think that can go a long way to alleviating a lot of co-founder.
Speaker 2:attention, I couldn't agree more. I see that my coaching has paid off. You've done a great job All right, great Paul. Thank you so much. Another great conversation and we'll talk next week. Bye, we'll see you next week.
