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Founder CEOs and Survivorship Bias

I’ve wondered before about the cause of founder/CEO outperformance. While it wasn’t always believed, there has been more research and more vocal advocacy over the last decade that the best CEO of a startup is the founder. Some assert the best CEO of any company is the founder.

And there are lots of convincing arguments for why.

But what if there is a simpler explanation for the outperformance?

What if it is survivorship bias?

Doesn’t it make sense that the worst founder-CEOs or their companies would get weeded out? Therefore they would not appear in the data that underlies the contemporary consensus view that founders make better CEOs?

And how much of a factor is it that founder-CEO companies tend to be newer and on average smaller? Does the relative size difference make it easier to grow or outperform?

What do you think?

 

 

 

By Miles Lasater with Julian Jacobs