Friends in High Places

And how to prevent them from clouding your judgement :)

Happy 2025, everyone! Let’s kick off the year with something that’s been on my mind for a while now: working with senior operators turned founders. It’s one of my favorite types of collaborations. Why? Because they bring such killer insights, ownership, and an unmatched level of execution to the table. But as much as I’m excited to work with them, there’s one phenomenon I’ve noticed time and again that I’ve started calling the ‘I Have Friends in High Places’ syndrome.

Let me explain.

When seasoned operators take the plunge into founding their own ventures, they bring with them a network—a vast pool of friends, colleagues, and goodwill built over years of shared battles and wins. It’s amazing, and honestly, relationships are the strongest currency in our ecosystem. But this very strength can sometimes create an unintended hurdle: false positives in the early stages of their venture.

Here’s what happens: a newly minted founder reaches out to their network to pitch their product. And because their friends know them, respect them, and admire their courage in taking this leap, they’re inclined to say yes. After all, starting up is tough, and most of us want to cheer on anyone brave enough to embark on that journey. You’d do it. I’d do it. It’s just human nature to want to help.

So what’s the problem? The early sales cycles end up being filled with ‘yes’—but not necessarily because of the product. These are goodwill sales. Don’t get me wrong; they’re not inherently bad. They’re often crucial for getting that initial momentum. But they also make it tough to benchmark the product’s true value and scalability. Selling to people who don’t know you—who don’t have a pre-built relationship—is a different beast entirely. It’s the acid test that determines whether your product can survive in the wild.

A Real-World Example: The Networking Trap

Take the example of a senior operator who transitioned into building a SaaS tool aimed at streamlining HR operations. Their first ten customers were all previous colleagues who knew the founder’s work ethic and reputation. These customers were eager to support the venture and gave glowing reviews. However, when the product was pitched to HR teams outside their network, adoption stalled. The feedback revealed that the tool lacked critical integrations and features necessary for broader market appeal. What seemed like an early success story turned out to be a cautionary tale of over-relying on goodwill.

If your network’s anything like mine, you’ll shout about your friends’ ventures from the rooftops. If they’re selling, I’m buying, and I’m telling everyone I know to buy too. But that doesn’t always translate to product-market fit. So, what can founders do to avoid the pitfalls of ‘I Have Friends in High Places’ syndrome?

Avoiding the Pitfalls: Three Steps for Operator-Founders

Here are three actionable steps I strongly recommend:

1. Demand Brutal Feedback and Actionable Insights Most people will hesitate to give their friends harsh feedback. It’s uncomfortable! But if you’re a founder, you need to chase the discomfort. Ask your early users not just what they liked, but what didn’t work for them. Insist on hearing their ‘no’s’ and understanding their hesitations. Make it safe for them to critique your product by explicitly asking for it and framing it as essential for your growth.

   A founder I worked with implemented a structured feedback session with their initial users, using anonymized surveys to ensure honesty. This uncovered key usability issues that their close network had glossed over.

2. Sell to New Markets—Sectors and Geographies You Don’t Know This is where you’ll truly learn if your product stands on its own. Can it win over someone who has no idea who you are? Can it thrive in a sector or geography where your name doesn’t carry weight? Testing your product outside your comfort zone is the best way to validate its potential and scalability. A health-tech founder I know deliberately targeted markets in Tier 2 cities rather than sticking to their metropolitan comfort zone. This revealed a surprising demand for features tailored to resource-constrained settings, which ultimately became a unique selling point.

3. Mindfully Avoid Biases It’s easy to fall into the trap of confirmation bias—seeing only the positive signals because they’re easier to digest. Be deliberate about seeking diverse perspectives. Surround yourself with advisors and early adopters who aren’t afraid to challenge your assumptions. Implement processes, such as anonymized surveys or external audits, to remove personal bias from your evaluations. Remember, objective data is your best friend in assessing what’s working and what’s not. A fintech startup used randomized A/B testing for their onboarding process, ensuring the feedback wasn’t skewed by their personal connections. The results helped them refine their user journey for broader appeal.

What Young Founders Can Learn From This

If you’re a young founder, you might think this doesn’t apply to you because you don’t have an expansive network yet. But here’s what you can learn from senior operators:

1. Leverage Relationships Strategically Build meaningful connections and goodwill early in your career. Even if you don’t have a vast network now, start cultivating relationships that could turn into future opportunities. A young founder I mentored reached out to alumni from their university for advice rather than direct sales. This approach created advocates who later connected them with key customers.

2. Learn to Seek Feedback Early and Often Developing a thick skin and a hunger for constructive criticism will serve you immensely. Use every interaction as a chance to refine your product and your approach. One founder created a feedback loop by incentivizing users with early access to new features in exchange for honest reviews. This iterative process accelerated product improvements.

3. Test Your Product in Varied Markets Don’t limit yourself to your immediate circle or comfort zone. Start testing your product with strangers and in spaces where you lack familiarity. It’s a great way to build resilience and adaptability. A D2C skincare brand began by targeting niche online communities before expanding into retail partnerships. This allowed them to identify gaps in their product line and refine their messaging.

Building a Framework for Long-Term Success

Whether you’re a seasoned operator or a young founder, creating a scalable business means embracing discomfort and venturing into uncharted territory. To summarize:

1. Seek Brutal Honesty: Feedback is the foundation of growth.

2. Expand Beyond Comfort Zones: Test your product in new sectors and geographies.

3. Counteract Biases: Use data and diverse perspectives to validate your assumptions.

4. Leverage Networks Wisely: Relationships are invaluable but must be supplemented with objective validation.

5. Iterate Relentlessly: Never stop improving based on insights from new and varied audiences.

So here’s to all the operator-founders out there: leverage your relationships, yes. But don’t let them blind you to the real work of building something truly enduring. And to the young founders: learn from this and start incorporating these lessons into your journey from day one. This year, let’s chase the hard truths and make them our building blocks. Cheers to a 2025 filled with growth, grit, and greatness!