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The pitfalls of Trapped Founder Syndrome

Founders can often end up trapped in product or sales, but when is it time to make the leap to CEO, and let your teams – and business – flourish? Glenn Elliott, talks from his personal experience.

For an entrepreneur, starting a company is all-consuming. You’re thinking about strategy, who to hire, what your products and services should be, building them, getting them in front of customers, delivering sales – everything. You’re working on the business and in it. 

Fast forward to several million in revenue, a few million in profit and over 100 staff. As Founder, where are you? Have you made the leap to CEO, or have you fallen victim to ‘Trapped Founder Syndrome’?

The path from Founder to CEO

The job of a CEO is to lead and grow a business. If, as Founder and CEO, you’re spending all your time in the business rather than on it, you become part of the business machinery, and no one is actually running it.

Most commonly, Founders can become trapped as Chief Sales or Product Officer, as well as CEO. You often come across companies who, when you ask about the product strategy, it’s whatever the Founder said last. This is where I ended up in my business. 

It’s hugely valuable at the start to have a Founder with a strong sense of product vision, what the customer needs and how the market will evolve. Founders should be able to imagine themselves in the future and build what’s missing. It’s also hugely valuable when Founders can be the super-sales person in those early years

That can carry on for some time, but it’s a problem when founders remain working in the business rather than on it. You end up with a single point of failure, falling victim to Trapped Founder Syndrome. 

Remedying Trapped Founder Syndrome

There comes a time in any business when it is big enough to need product infrastructure and an independent sales function. It will need a full-time CEO to look at how departments are functioning, and how the executive team is interacting, plan strategy, and review how people and processes are working. 

It will need someone to set the direction, remind staff of the company’s mission and goals, and to constantly look at the business’s tools, functions, and internal systems. They need to ask questions like, how does it feel to work there? Has it got the right HR policies and practices to make it a great place to work?

If a Founder who is also the CEO is spending 80 per cent of their time on product or sales, then who is leading the business – and making it better?

Releasing the CEO

To build a sustainable business, you have to build functions that operate independently of the Founder or CEO. That’s the goal of any entrepreneur – to build something that has a life outside the Founder, so when you decide it’s time to move on, it can thrive. 

In reality, though, it can be challenging to come out of an area that is familiar – you know it, you’re good at it, and it works. You have the whole history of the company in your head. Which is why, to get yourself as CEO out of, say, sales, you’ll need around six to eight people to do things like demand generation, lead generation, consulting and closing. You have to design a sales infrastructure, recruit, and then build a pipeline. 

It’s not a quick or easy process. A sales team was one of the first things I built in my business, and my early efforts were disastrous. Because I’d never done it before, it took me five years and three real attempts. 

That’s why, if you’re the CEO and responsible for sales, and you want to be moving on from that in three or four years, you need to start building that team now. It’s going to take a lot of thinking and forward planning, and it will be difficult. But it’s much easier hiring your 21st salesperson than your first. You’ll have figured out what is right, and you’ll know what good looks like. 

But how do you be a CEO?

So now you’ve hired your sales team, what are you going to do? You’re going to be the CEO and strategically lead the business. But what does that mean? There’s no rule book. I did it for 20 years, and no one ever gave me a job description. 

Of course, you’re frightened because maybe you won’t be good at it. How do you know how to ‘do’ leadership? What does success look like? Where do your satisfaction and pride come from? 

But how do you learn how to do anything? Repetition, practice and getting at it. If you’re part of a portfolio like Tenzing, you can talk to the other CEOs and get guidance from people like me. But you have to find your own path. There’s no perfect CEO, and that’s one of the hardest things about it. Tim Cook is not Jeff Bezos. Both are stunning CEOs but completely different. 

Can you stay trapped – and successful?

Sometimes as a Founder, you might decide you don’t want to be CEO. That’s fine. You absolutely can remain as Founder and, say, Chief Product Officer and recruit someone else as CEO.

That path isn’t easy for everyone, though. It will require a lot of humility to let someone else make decisions about your baby whilst you are standing so close by. Will you be ready for them to make decisions you might not understand or agree with? If you can do it, it can be fantastic, but not many entrepreneurs can.

The key thing you always need to ask is: who is leading this business? Who is looking around the corner to see what is coming next? What are customers going to need in four years’ time? How are staff feeling? 

It is key to avoid a leadership vacuum, as people will ultimately disengage with the business if they feel it’s not being run properly. You might still bring in sales, but without product and strategy developments, you will stunt growth. There are thousands of businesses that aren’t going bust, but their growth has stagnated specifically because the person who holds the CEO title isn’t actually doing the CEO’s job. 

Things have to be different in a private equity business. Your whole job as a private equity CEO is to grow the business over a four to five-year lifecycle to make investors three time’s their money. And that’s why you can’t do everything.

Why the CEO that can’t do everything is a blessing 

The benefit of Founders is they can often do any job in the business – that’s also the problem. It can be tough mentally to stand back for fear of things dropping off, so they can interfere everywhere. When you’re growing, it can indeed be beneficial to have your Founder give their opinion on everything. 

But when you get to the point where you have enough skills and expertise in the business, then what you need is a CEO who can’t do everything – that’s when your teams can really step up and flourish. 

If you’re a trapped Founder, you have to think, are you driving your business to the point of stagnation? Or is it time to free yourself and build a resilient business that will last long after you have moved on?


Glenn Elliott

Glenn Elliott

Glenn is a serial entrepreneur with over 20 years of CEO experience. He sold his last business, Reward Gateway, to PE three times. His skills are in product, engineering, sales and marketing, and his passions are leadership, company culture, employee engagement and social justice. In 2018, he wrote the Amazon HR Bestseller, Build it: A Rebel Playbook for World-Class Employee Engagement.
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