The first success of a struggling founder in a start-up is when cash flow turns positive and customers start placing repeat orders. The next stage is one of heady growth, hiring and expansion. The organization grows but without systems, processes or controls. There are several conflicts a growing organization encounters in its adolescence phase when the founder can no longer individually manage it and there is a need to hire experienced managers. This leads to a conflict with the original team who resents this induction of experienced managers. The founder is usually unable to manage this conflict & looks for managers who culturally fit in.

The biggest challenge at this stage is the inability of the founder to change his/her leadership style. The companies where the founders can change their leadership styles to manage a more mature organization, prospers. But those who fail this leadership test don’t make it past this stage and the company gets acquired or goes into a decline.

Founders who can successful navigate such treacherous currents create an institution that outlives them.