A founder raises a large round, hires fast and grows revenue quickly. Everyone calls it a success. Eighteen months later the company collapses, and the same decisions are described as reckless.
Another founder spends months testing a problem carefully, decides the market isn’t there and shuts the company down. On paper, it’s a failure. In reality, it may have been the best decision they could have made.
In uncertainty, outcomes are a lagging and misleading indicator of decision quality. That’s true for founders, and it’s just as true for the programmes and funders trying to support them.
Why startups don’t get clean feedback
In most jobs, feedback is reasonably clear. You do something, you see the result, and you learn. Startups don’t work like that.
Signals are weak. Early on, a founder might have a handful of customer conversations, a few pilot users and some early sales. It’s very hard to tell what’s a real pattern and what’s coincidence.
Feedback is delayed. The effects of a decision about pricing, hiring or market choice may not show up for months.
Luck plays a big role. A single large customer, a well-timed press article or an economic shock can change results in ways that have little to do with the quality of the founder’s decisions.
Decision researcher and former professional poker player Annie Duke calls the habit of judging decisions by their outcomes “resulting”. In startups, resulting is everywhere.
How growth hides problems
Growth is the most misleading signal of all. When numbers are going up, problems are easy to overlook.
Revenue growth can come from a single customer who might leave. User growth can be bought with marketing spend that isn’t sustainable. A large funding round can be mistaken for proof that the business works, when it only proves that investors were persuaded.
Meanwhile, the weaknesses underneath keep growing: a product customers don’t really need, a team hired before the model was proven, unit economics that don’t work. When growth slows, they all appear at once, and by then many decisions are very hard to undo.
Why metrics arrive too late to help
Most of the metrics founders and funders watch are lagging indicators. Revenue, churn, burn rate and runway tell you what has already happened. By the time they show a problem, the decisions that caused it were made months earlier.
That doesn’t make metrics useless. But it means they’re poor tools for judging decisions in the moment. A founder who waits for the numbers to tell them they’re wrong will usually find out too late.
Why outsiders see issues too late
The same problem affects everyone around the founder. Programme managers, funders and boards usually judge founders by reported results: traction at demo day, growth in quarterly updates, the size of the next round.
These are exactly the signals that arrive late and mislead. Programmes that judge founders this way end up rewarding the founders who look successful in the short term, not the ones making good decisions. And they often only spot real problems when it’s too late to help.
What experienced founders do differently
Experienced founders don’t have perfect information. What they have is a different relationship with uncertainty.
They judge decisions by the process, not the result. What did I know? What did I assume? What would have to be true for this to work? How will I find out quickly if I’m wrong?
They look for evidence that they’re wrong. Instead of collecting signals that confirm the plan, they actively look for signals that contradict it.
They make small bets before big ones. Testing an assumption cheaply before committing serious time and money keeps the cost of being wrong low.
They have high learning velocity. They seek feedback quickly and change course when the evidence demands it, without abandoning the overall goal.
Much of this comes from pattern recognition. Founders who have built and exited companies have seen how certain decisions play out. They can recognise the early signs of a problem long before it shows in the numbers. That’s why mentors with real operating experience are so valuable: they can correct a founder’s decision while it can still be changed.
A simple habit for founders: write the decision down
Founders can start judging their own decisions better with one simple habit: writing down important decisions at the moment they make them.
For each significant decision (a pricing change, a key hire, a new market, a pivot) note:
- what you decided, and what alternatives you considered
- what you knew at the time, and what you were assuming
- what you expect to happen, and by when
- what evidence would tell you that you were wrong
A few months later, go back and compare. Not to ask “did it work?” but to ask “was my reasoning sound, given what I knew?” Sometimes a decision worked out for reasons that had nothing to do with the reasoning. Sometimes a sound decision failed because of something no one could have predicted. Over time, the pattern shows a founder where their judgement is strong and where it needs work.
It’s a small discipline, but it separates learning from luck, and that’s what builds better decisions over time.
Assessing decision quality before results are obvious
For programmes and funders, this means changing what gets assessed. Instead of waiting for results, look at the quality of the decisions as they’re made:
- Has the founder validated the problem with customers, or are they building on assumptions?
- Did they consider alternatives before committing to a solution?
- Can they explain what evidence would change their mind?
- How quickly do they act on feedback?
- Are their decisions being reviewed by someone who has done this before?
These questions can be answered in weeks, not years. They give a far more reliable picture of whether a founder is likely to succeed than early traction alone.
Decision quality must be assessed before results are obvious
Good decisions don’t guarantee good outcomes, and bad decisions sometimes get lucky. Over time, though, founders who consistently make good decisions under uncertainty give themselves far better odds.
The job of a founder development programme is to build that consistency, and to judge it directly, rather than waiting for results that arrive too late to help.
Want to build programmes that judge founders on the decisions that matter? Talk to us.