Is it possible that one of the simplest reasons that most startups fail is because of the “emperor’s new clothes” paradox? Founders tend to surround themselves with founders and first hires that are too close to them, and rather than speaking up and calling it as they see it, they pander to each other’s views in an effort to save positions, friendships or their job. I believe that this paradox directs the founders to pursue fundamentally stupid ideas with little substance, ultimately leading to the demise of the company.

In Guy Kawasaki’s book Enchantment, he explains the benefits of a diverse team. “A diverse team helps make enchantment last, because people with different backgrounds, perspectives, and skills keep a cause fresh and relevant. By contrast when a naked emperor runs a kingdom of sycophants and clones, the cause moves towards mediocrity.”

In Think Twice, Michael Mauboussin’s book on harnessing the power of counter intuition, he talks about seeking out dissent by finding data from “reliable sources that offer conclusions different than yours. This helps avoid a foolish inconsistency.” He continues, “When possible, surround yourself with people that have dissenting views. This is emotionally and intellectually very difficult but is highly effective in exposing alternatives.”

I agree with Guy and Michael to a degree and think that this is a fundamental reason for most startup failures. If we can resolve or prevent this common paradox it will result in much better outcomes. So how do we overcome such tendencies, obtain diverse viewpoints, and avoid sycophant behaviour in our workplace?

I am glad you asked! If you think like me, it is not so much about finding the right people, more about creating the right environment and understanding so that this can occur. To make sure that instead of getting acquiescence we get as close as we can to real agreements, we are going to need a radical overhaul in thinking.

Our proposed solution is to create a simple and precise value system that creates a safe working environment where the lowest of positions can effectively have as much say as the top position and will not suffer any unfair treatment in the process.

We call it Decarrt (pronounced as per the philosopher), which serves as an agreement among our team to use the same system for moderating and resolving issues, problems and resulting disputes. Additionally, Decarrt is a guiding philosophy for all we do as an organization.

1. DaringBe willing to step up when the need arises and even when there is not a need, and stand up for stepping up.

Making it …

2. EnjoyableEnsuring how we step up is enjoyable for all, a roller coaster ride should still be fun.

3. ConsideredBeing cautious when we step up, using disclaimers, like “I think”, appreciation, acknowledging and apology like “I beg to differ”. Understanding that anger can be understood as a tool for identifying a problem, but not as to tool for solving it. Old fashioned politeness can still go a long way.

4. AccountableWhen we step up successfully we get the accolade, but when not successful we can acknowledge it and give an acceptable apology.

5. ReasonableWe step up using evidence based reasoning rather than mere emotive views and hearsay. Dogma, stubbornness and post-truth not really being appreciated.

6. ResponsibleBeing more formal and prepared in our approach to stepping up, like complaining responsibly & going direct to the person or source of the issue.

7. TransparentWe are all part of the exploration of stepping up and what we say and do is always open to scrutiny, no matter who it is as we all strive to improve it.


Now, from the cleaner to the CEO we can all have an equal say, providing we are willing to accede to the agreed upon values. Anyone in the company can dare to suggest a solution to any problem, and if they feel confident and daring they could even step up and take responsibility for solving it with the support of the rest of the team. In the end, they’ll receive the accolades if successful or have to acknowledge and apologise if they fail.

Is Your Startup Part of the Paradox?

This is very easy to test to see if your startup or company falls under this paradox. If you have not set up a detailed and agreed upon process for sorting out disputes, then there is a good chance you are part of the “emperor’s new clothes” paradox. A good example is where founders and staff have agreed to resolve a dispute by going directly to the person(s) involved. Then if unsuccessful they’ve agreed to bring a witness and if still unsucessful go before the team to explain and try resolve the dispute.

This means that the CEO could be brought before the team by the cleaner to resolve a dispute. No one is above this transparent process!

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