Let’s discuss something many startup founders (or small businesses) rarely discuss or try to hide: the lack of talk about having or building confidence. This is not a light “motivational” or “emotional” article. We explore how confidence works through all aspects of a business with leaders and teams as the expressing medium.
Guess what? Confidence cannot be built with tricks or commands. Audacity is not confidence, and it is easy to break. Absolute confidence comes with self-discovery and awareness. It comes from learning or being guided/helped to find ways to explore the path to the reasons behind the lack of confidence.
When discovered, confidence gradually emerges. Then you act not with confidence but become one with your truth, embodying confidence since it was always there.
We found out (in Groowise) that confidence in sales or our presentations is a direct result of a combination of knowledge, caring, and a rigid, continuous process of self-discovery.
Confidence is a double-edged sword in the startup world. Studies show that it can inspire success, boost influence, and predict entrepreneurial achievements. A confident founder projects vision and conviction, which attract investors, employees, and partners.
Yet, unchecked confidence can lead to costly errors, poor decisions, and missed reality checks.
This report examines how confidence influences four critical areas of startup success – leadership, fundraising, decision-making, and team motivation – highlighting both the positive impact and the potential pitfalls.
We draw on expert opinions and case studies to illustrate how the right balance of confidence can propel a venture forward, while overconfidence or lack of confidence can undermine it.
We approach the subject in different sections of a business, but revealing your authentic, confident self is not necessarily “business-related.” Yet, running or managing a company provides a rather fruitful ground to explore your way towards revealing confidence. If you haven’t read my book “Fear, This Liar“, you should go after it (available in English and Greek in various formats).
Confidence in Leadership
Whether big or small (or medium-sized), leading just yourself or others needs a lot of confidence. It comes with knowledge, which is not limited to skills.
Can Confidence be a Leadership Asset?
In startup leadership, a founder’s confidence can set the tone for the organization. Leaders who project confidence instill a sense of security and trust in their teams. Research shows that when leaders exude calm self-assurance, team members feel more secure and are more likely to be engaged and go the extra mile.
One leadership coach noted, “When leaders project confidence, their teams feel more secure… positive energy and confidence inspire us to push ourselves beyond what we thought we could do.”
In practice, confident leaders articulate a clear vision and optimism even in adversity, which can rally teams during tough times. They “set the emotional tone” for the startup – by radiating resilience and decisiveness, they help the team maintain morale and focus.
For example, many credit Steve Jobs’ unwavering confidence in his vision as a driving force behind Apple’s innovative leaps, as his certainty often inspired employees to achieve what seemed impossible. Studies consistently find that inspirational leaders excel at showing confidence in the organization’s ability to reach its goals, instilling hope, and motivating people to persevere.
In short, appropriate confidence in a startup leader builds credibility, energizes employees, and fosters the trust needed to navigate high-risk ventures.
Can Confidence be a Dark Thing?
While confidence is vital, there is a thin line between confidence and hubris. “Confidence without humility can easily turn into hubris, which alienates teams.”
Founders with unchecked egos may stop listening to feedback or assume they are infallible. What begins as decisive leadership can morph into stubbornness and an unwillingness to listen to others
This “dark side” of confidence has been observed in certain high-profile founders: initial charisma and conviction attract followers, but later overconfidence manifests as autocratic or narcissistic leadership.
For instance, an overly self-assured founder might insist on their approach in every detail, leading to micromanagement that stifles the team’s autonomy and creativity.
A founder’s high self-confidence can devolve such that “what once was seen as decisive leadership can start to look like stubbornness… The founder is involved in every detail, stifling the autonomy and creativity of the team. Employees may feel undervalued and overruled, leading to frustration and disengagement.”
Such environments can become toxic.
A case in point is Uber under Travis Kalanick—his bold, confident leadership drove rapid growth. Still, his reputed arrogance and refusal to heed warnings contributed to a toxic culture and his eventual ouster.
Likewise, WeWork’s meteoric rise and fall illustrates overconfidence in leadership: founder Adam Neumann’s charisma and confidence attracted billions in investment and a devoted staff, but his hubris in decision-making (and personal excesses) ultimately undermined the company.
Inspiring leaders are confident but not arrogant. They combine “calm self-assurance” with openness to feedback and admit when they’re wrong.
This balance, often termed “confident humility,” is crucial. Leaders who remain humble even in confidence foster trust and collaboration, whereas those who cross into arrogance risk alienating their teams and failing to adapt.
In summary, confidence enhances leadership effectiveness only when tempered with humility; overconfidence, by contrast, can derail both the leader and the startup.
Can Confidence Bring Money In?
In the fundraising arena, founder confidence can make or break the pitch.
Investors often cite founder conviction as a key factor in funding a startup. Venture capitalist Mark Suster bluntly emphasizes that “confidence is CRITICAL in fund raising” because investors are human – “If you don’t act in demand, people will subconsciously know you’re not in demand.” The same person mentions that “…Fund raising is a confidence game so you can’t let yourself get psyched out by the early ‘no’s’…”
In other words, a confident demeanor signals that your startup is desirable and destined for success, triggering investors’ fear of missing out.
Successful founders approach investor meetings firmly believing in their vision and project an aura of inevitability.
For example, many founders practice the mantra “fake it till you make it,” exuding confidence in growth projections and product potential even at early stages.
This isn’t about dishonesty but demonstrating unshakeable belief in the startup’s future.
According to one fundraising advisor, great entrepreneurs often have “delusional confidence” – a near-irrational optimism that nothing can stop them. They “see the biggest dream future possible [and] sell it to investors as a no-brainer. 1000 no’s means time hasn’t caught up yet.”
This kind of bold confidence helped companies like Airbnb and SpaceX secure funding despite early skeptics; the founders’ passion and certainty convinced investors to bet on a vision that seemed crazy to others.
Case studies abound of entrepreneurs who faced dozens of rejections but persisted – pitching confidently until they finally got a “yes.”
For instance, Brian Chesky of Airbnb famously continued to approach investors after countless turn-downs, refining his pitch each time. His unwavering confidence in the idea (renting airbeds in strangers’ homes) eventually persuaded venture capitalists and is often credited as a factor in Airbnb’s breakthrough.
In short, a healthy dose of confidence signals competence and leadership to investors, making them more likely to trust the founder with their capital.
Overconfidence and Investor Backlash
Conversely, too much confidence in fundraising can lead to overselling and credibility issues.
There’s a delicate balance between persuasive optimism and unrealistic hype. Investors may be drawn to confidence, but it raises red flags if a founder crosses into exaggeration or arrogance.
A cautionary example is Theranos: Elizabeth Holmes’s extreme confidence and charismatic pitch attracted high-profile investors and a ~$9 billion valuation, yet the technology never delivered.
In retrospect, observers note that people too easily equated Holmes’s confidence with actual competence, allowing her to raise massive funds on a false premise.
Venture partner Tom Chi calls this phenomenon “charisma distortion”—when investors are seduced by a founder’s charm and bold claims, they “believe things that aren’t true,” which is a major risk.
Chi explicitly points to WeWork’s Adam Neumann and Theranos’s Holmes as founders whose magnetic confidence “could sell ice to an Eskimo”, inducing backers to ignore glaring problems.
The fallout from such cases underscores that overconfidence can backfire spectacularly.
If promised results don’t materialize, the very investors won over by confidence will lose trust, leading to public backlash and valuation collapse.
Moreover, seasoned investors do diligence; a founder who dismisses tough questions or refuses to show humility can turn off potential backers. For this reason, experts advise balancing confidence with transparency. Renowned entrepreneurs stress that courage doesn’t mean being cocky. As one biotech CEO put it: “You need to be courageous. But that doesn’t mean you should be overly confident.
Humility and knowing where you fall short…and should seek out help is just as important.”
In fundraising, honesty about challenges can enhance credibility, whereas brash overconfidence may be viewed as naiveté or deceit.
Thus, while confidence attracts investors, overconfidence – especially unbacked by substance – can damage investor relationships and a startup’s long-term prospects.
The strongest fundraisers exude optimism and certainty in their vision while remaining realistic and open to concerns, building investor confidence without veering into hubris.
Confidence in Decision-Making
Startups operate amid uncertainty, and founders must make high-stakes decisions quickly – from product pivots to hiring to strategic shifts. Here, confidence in one’s judgment is a valuable asset.
A confident founder will decisively choose a direction and commit, rather than succumbing to “analysis paralysis” or constant self-doubt. Confidence is often the unspoken currency of effective decision-making.
Jump to the end of this article for the complete “Effective Founders Project by Google”.
Leaders who are secure in their vision can make bold moves that break new ground. Research supports this: a Finnish study found that higher self-confidence was predictive of an individual choosing entrepreneurship and their entrepreneurial success.
In practice, this means that entrepreneurs who believe in their ideas and ability to execute are more likely to start a business and drive it to success. Indeed, many successful founders exhibit almost irrational levels of self-belief, which propels them to attempt what others consider too risky.
For example, Elon Musk’s confidence in reusable rockets led SpaceX to attempt and eventually achieve rocket landings that aerospace experts deemed impossible; without that bold conviction, such groundbreaking innovation might never have been pursued.
Similarly, early-stage founders often must trust their gut when hard data is sparse—entering a nascent market or sticking with a product pivot. Confidence helps them navigate ambiguity and stick to their course even when naysayers abound. One university entrepreneurship center noted that founders who feel supported are more likely to lead confidently, make better decisions, and cultivate healthier teams.
The optimal mindset is “secure enough to trust their judgment and also accept that it is fallible”, achieving balanced decisiveness.
In summary, confidence fuels decisive action and resilience in decision-making, which are critical in the fast-paced startup environment.
Overconfidence Bias and Pitfalls
While confidence enables action, overconfidence can distort decision-making and blind founders to risks. Psychologists refer to overconfidence bias as a common cognitive trap for entrepreneurs: it occurs when one’s subjective confidence in one’s decisions exceeds the objective accuracy of those decisions.
In startups, this bias can be deadly. Founders brimming with unchecked confidence may ignore valid concerns, fail to seek input, or persist with a flawed strategy for too long. As one Forbes contributor warned, “Overconfidence can tamper with decisions and bury risks in plain view… it can take the whole thing down.”
In other words, an overconfident CEO might charge ahead without contingency plans, not seeing the “red flags” right before them. Empirical research backs this up: overconfident CEOs are more likely to undertake significant acquisitions that destroy company value.
They also tend to be slower to recognize and correct their mistakes – one study found that bosses with inflated self-belief were slower to adjust forecasts when those forecasts proved wrong.
Startups require agility and quick pivots when assumptions prove false; an overconfident founder may stubbornly stay the course, wasting precious time and resources.
A classic example is BlackBerry’s leadership clinging to keypad phones despite the iPhone’s emergence. Their overconfidence in past success led to poor strategic calls, and the company lost its market. In contrast, successful founders learn to check their egos and adapt. As the Founder Institute cautions, entrepreneurs should “know what you don’t know” and bring in others’ expertise to mitigate overconfidence.
Confirmation bias often pairs with overconfidence: founders might only seek information that validates their idea and dismiss dissenting data.
This tunnel vision can prevent necessary pivots. Avoiding these pitfalls requires humility and external feedback. Venture coach Priscilla Kraft’s research suggests that “puffed-up” leaders need guardrails. For instance, startups with very confident CEOs fare better if they have strong boards to keep the CEO’s boldness in check.
By contrast, leaders suffering from impostor syndrome (explained in detail in our book) or extreme self-doubt pose a different risk: they might hesitate to act or constantly second-guess decisions, which can stall progress.
Thus, the key insight is that balance matters: enough confidence to decide and persevere, but not so much that one becomes inflexible or blind to flaws.
Smart founders cultivate what expert Adam Grant calls “confident humility”, combining bold vision with openness to learning. They hold their opinions “strongly but weakly held” – confident in direction yet willing to pivot when evidence dictates.
In practice, this means aggressively pursuing your plan but regularly testing assumptions and listening to mentors or data contradicting your views. In decision-making, confidence accelerates execution, but overconfidence can accelerate failure if not managed.
Confidence and Team Motivation
A founder’s confidence doesn’t just affect themselves – it profoundly influences the morale and motivation of the team. Confidence is contagious.
Psychologically, people are likelier to follow and perform under a leader who displays conviction rather than doubt. As one analysis said, “Someone declaring a position with ringing certainty is more likely to inspire than someone who hedges their bets.”
In startup teams, where uncertainty is high, employees take cues from the leader’s temperament. A confident leader who consistently communicates an exciting vision and believes in the team’s ability can ignite passion in the workforce.
Leadership experts note that what makes a leader most effective is the ability to inspire people – giving them a vision and motivating them through the leader’s optimism, energy, confidence, enthusiasm, and determination.
In practice, this means that employees stay motivated to push forward when the CEO remains upbeat and self-assured about the mission (especially during challenges).
For example, during the early PayPal days, Elon Musk’s bold confidence in ultimately transforming payments kept the team focused on experimenting despite frequent setbacks.
Teams often “buy into” a startup’s lofty goals because the founder’s confidence makes those goals feel achievable. Indeed, a long-term study of 1,800 leaders found that those who could “light a fire under people” shared a pattern: they “excelled at building trust [and] showing confidence in the organization’s ability to achieve its goals,” which in turn “instilled hope and motivated and energized people to persevere.”
Engaged and motivated employees are far more likely to excel and exceed targets, and a confident leadership style is a major driver of such engagement.
Even in crisis, a leader’s confidence can steel the team’s nerves. When a founder calmly assures the team, “We will get through this,” it reinforces collective resilience. In sum, a confident leader inspires confidence in others: employees feel part of a winning cause and are driven to give their best effort.
Impact of Low Confidence or Hubris on Teams
Conversely, team motivation can collapse if a leader lacks confidence – or if their confidence veers into destructive territory.
Employees look to the founder as a bellwether for the company’s performance. Visible self-doubt or pessimism at the top can erode morale.
If a CEO frequently expresses uncertainty or appears defeated by challenges, the team may lose faith in the vision (“if our own leader doesn’t believe we can succeed, why should we?”).
One consulting study noted that leaders who focus on worst-case scenarios and “consistently express doubt about the future dampen the team’s morale”, making employees feel hopeless.
Lack of confidence can manifest as indecision or constant pivoting, leaving teams feeling directionless and anxious. On the other hand, too much confidence can be equally damaging internally: an arrogant, *overconfident leader may ignore their team’s ideas, dominating every decision.
This alienates talented staff and kills initiative. We discussed earlier how narcissistic founder behavior – micromanaging, not listening, taking all credit – leads employees to disengage
Team members may feel undervalued and overruled, sapping their motivation.
In extreme cases, employees lose confidence in the CEO due to these behaviors, which creates a poisonous culture. One team member in a startup with an ineffective CEO recalled that “the impact…was an internal lingering lack of motivation… an underground, incredibly toxic part of our culture,” as people whispered about their lack of faith in the leader.
When a critical mass of the team lacks confidence in the founder’s abilities or vision, productivity plummets and attrition rises – top performers won’t stick around under uninspiring or tyrannical leadership.
Startups like WeWork saw a morale nosedive when revelations of the founder’s misguided decisions emerged, as employees felt the trust was broken. However, these outcomes are avoidable.
A founder can maintain team confidence by combining optimism with authenticity and listening. It’s telling that “confidence and morale are inseparable” in startups – when one falters, so does the other.
The best leaders sustain team motivation by sharing credit, remaining approachable, and demonstrating faith in their people.
For example, Satya Nadella’s empathetic yet confident leadership at Microsoft transformed its culture; he boosted morale alongside performance by trusting employees’ ideas and highlighting successes.
In summary, confidence significantly affects team motivation: a balanced, encouraging confidence from leadership can galvanize a team, whereas either a deficiency of confidence (instability) or an excess (authoritarian hubris) can demoralize and fragment it.
Key Takeaways
Confidence is pivotal in a startup’s trajectory. It influences how founders lead teams, attract investors, make decisions, and inspire those around them.
The evidence and cases reviewed show that confidence is often a positive force behind startup success: it enables bold leadership, persuasive fundraising, decisive strategy, and enthusiastic teams.
Many of the world’s successful startups were led by founders with almost audacious levels of self-belief, allowing them to defy odds and skeptics. One Economist analysis observed, “Irrational levels of self-belief are a hallmark of many successful founders.” Indeed, confidence can be the “secret sauce” that pushes a startup from idea to reality.
However, we also see the double-edged nature of confidence.
Overconfidence – untempered by feedback or realism – can lead to severe consequences, from strategic blunders to toxic workplaces and collapses like Theranos or WeWork.
Conversely, under-confidence can result in hesitant leadership and a demoralized team that struggles to execute.
The key insight is that balance and self-awareness are essential. Founders must cultivate enough confidence to instill conviction, resilience, and humility to question themselves and continuously learn.
As experts advise, the optimal mindset for long-term startup success is adopting “confident humility”—believing deeply in one’s vision while remaining open to advice and aware of one’s fallibility.
With this balance, confidence becomes not bluster but a genuine leadership strength: it engenders stakeholder trust, empowers sound decision-making, and motivates teams to achieve extraordinary outcomes.
The most successful startup leaders harness confidence as a positive driver while keeping its potential negatives in check. Ultimately, confidence in a startup is contagious – when a founder genuinely believes and perseveres, it inspires others to join the journey.
But it must be backed by competence, guided by humility, and constantly recalibrated with reality to turn that shared confidence into lasting success.
Sources: Supporting evidence has been drawn from leadership coaching analyses, investor insights, and academic studies. These include research on how charismatic confidence boosts team performance.
All sources reinforce the central theme: confidence, wielded wisely, is a cornerstone of startup success – but unchecked, it can be a severe liability.
So, how can someone work with themselves and/or their teams to build up a substantial amount of confidence, become creative and a leader, and avoid becoming destructive?
Do give us a call/email and find out.
