Every now and again I meet folks who have tagged along with a popular founder into a new venture. By popular founder, I generally mean someone who has recently had a big sexy exit. If they had an exit before, what can go wrong? The founder had a great exit last time; VCs are lining up and the team looks amazing. But sometimes this could mean following popular founders to the slaughter.
Here’s the thing, while second time founders are more likely to succeed then first time founders, there are some reasons why you should be reluctant. Not only do they still fail more than they succeed, but also their flameouts are bigger.
VCs Get Star Struck
Second-time founders often get the benefit of the doubt. Money and talent can flow their way, which when aligned against the right idea can be a great advantage. But there are a lot of times where these founders are chasing bad ideas. Ideas that VCs wouldn’t normally fund and great team members wouldn’t normally sign up to build. Everyone can get a little crazy when they’re star struck and say “yes” when they would normally say “no.”
The Metrics Don’t Add Up
With extra cash and support, these ventures can burn up lots of resources – time and money – before meeting their maker. And if you sign up for the ride they can burn up lots of your time too. With extra resources founders can pave over the cracks. Meaning they can overpay for growth or other key metrics replicating a healthy business when in fact the model is unsustainable and the business will not survive.
Time Is Your Biggest Asset
The great danger for you as a junior team member is that you can waste time. You can quickly lose 3 years working on a bad idea, when you can be building a winner. While there’s nothing more exciting than following a popular founder into battle, be sure that you believe he or she can actually win.