#488 Why Startups Fail: Logan Yonavjak and Niels Brabandt on Leadership Capacity, Coachability and Founder Readiness
Why Startups Fail: Logan Yonavjak and Niels Brabandt on Leadership Capacity, Coachability and Founder Readiness
Startups are often celebrated for bold vision and disruptive ambition. Yet failure rates remain stubbornly high. In this rigorous conversation, Logan Yonavjak joins Niels Brabandt to examine why startups fail and how leaders can act better before, during and after the founding process.
Drawing on her background in impact investing, private equity and early-stage capital deployment, Logan Yonavjak challenges a widely held narrative. While founders frequently attribute failure to market timing, the data tells a different story. Research referenced in Harvard Business Review suggests that approximately two-thirds of startup failures stem from internal dynamics rather than external market conditions. Logan Yonavjak’s own experience with venture capitalists and accelerators reinforces this conclusion.
The implication for decision-makers in business is significant. Leadership capacity, team dynamics and coachability are not soft variables. They are decisive performance drivers.
At the centre of Logan Yonavjak’s work with the Founder Readiness Institute is the concept of leadership capacity. Unlike traditional personality assessments that categorise individuals as introverts or extroverts, her approach measures the ability to think, behave and act under pressure over time. Capacity is revealed in moments of complexity and stress.
Niels Brabandt probes the difference between motivation and readiness. While mindset and optimism are indispensable in the volatility of startup life, they are insufficient in isolation. The modern founder must tolerate uncertainty, manage cognitive overload and integrate multiple perspectives without collapsing into reactivity. This is where leadership capacity becomes measurable.
A particularly innovative element of Logan Yonavjak’s methodology is the AI-augmented assessment layer. Through quantitative linguistic analysis of spoken responses, patterns of responsibility, flexibility and coachability can be identified. The goal is not to replace human judgement, but to enhance insight into how founders process feedback and navigate ambiguity.
The conversation highlights three recurring mistakes among startup leaders. First, the romanticisation of the chief executive role. Not every visionary is prepared to carry the psychological burden of scaling an organisation. Second, reactive decision-making under stress. Without deliberate self-regulation practices such as pausing and breath control, leaders default to fight, flight or freeze responses that impair strategic clarity. Third, defensive responses to feedback. Leaders who interpret critique as personal attack limit their own developmental trajectory.
Logan Yonavjak emphasises identity flexibility as a critical trait. Leaders capable of integrating feedback objectively demonstrate higher resilience and adaptability. Those who externalise blame or resist coaching risk stagnation.
For Niels Brabandt’s audience of executives and founders, the message is both sobering and empowering. Market conditions matter, but they are rarely the sole determinant of failure. Leadership readiness, psychological maturity and disciplined self-observation shape outcomes at least as profoundly.
Preparing founders for complexity requires more than capital and ambition. It requires structured development, reflective practice and measurable insight into behavioural patterns. As Logan Yonavjak and Niels Brabandt make clear, startups do not fail solely because of flawed ideas. They fail when leaders are unprepared for the internal demands of growth.
The future of entrepreneurship depends on elevating founder readiness from an afterthought to a prerequisite.
Niels Brabandt
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More on this topic in this week's videocast and podcast with Niels Brabandt: Videocast / Apple Podcasts / Spotify
For the videocast’s and podcast’s transcript, read below this article.
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Let's have a chat: NB@NB-Networks.com
Contact: Niels Brabandt on LinkedIn
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Niels Brabandt is an expert in sustainable leadership with more than 20 years of experience in practice and science.
Niels Brabandt: Professional Training, Speaking, Coaching, Consulting, Mentoring, Project & Interim Management. Event host, MC, Moderator.
Podcast and Videocast Transcript
Niels Brabandt
Startups: you see them poorly everywhere, you see them growing, or you see them failing. And the question is, why do they fail, and how can you do it better? We have an expert with us here today who walked the talk and can tell us how to do it right. Helen, welcome. Logan Junaviak.
Logan Yonavjak
Thank you so much, Niels. It's great to be here.
Niels Brabandt
Thank you very much for being here, and of course I will get straight into the interview as I always do. I mean, lots of people love to comment on startups, and of course the first question I have to ask is, what qualifies you to be an expert on the matter?
Logan Yonavjak
Great question. So I would say it's a great combination of me and my co-founder, Benji Whitehurst. So I come from the investing world. I've spent most of my time in impact investing the last 20 years, looking to deploy capital into things that matter for people, planet, and profit. And so a lot of my work has been in the early-stage investing space, have worked in private equity, and I've personally just seen a lot of team dynamics and leadership failures that prevented a lot of the outcomes that I was excited about seeing in society.
Logan Yonavjak
And so that just kind of got the wheels turning over the years, made a lot of observations, and have had personally a longstanding interest in Jungian analysis, psychology, from a young age. So I'm bringing that personal interest back into my career with this company, the Founder Readiness Institute.
Logan Yonavjak
And then my co-founder, Benji Whitehurst, he's a psychologist by training. He has a data science background and also an MBA. So I think the combination of both of us, him having studied adult vertical development for 20 years, really is an amazing combination for solving what we are aiming to solve, so.
Niels Brabandt
Absolutely. Absolutely. And you just said you saw a lot of team dynamics. Many startups which fail say, "Oh, it was market failure. Our idea was brilliant, but the market just wasn't ready. We were too early. It's all about the market, not about us." What's your take on that?
Logan Yonavjak
Yeah, I have three things to say about that. I think one is the data shows that it's not the case, that it's just the market, or that it's the market first. 65% of companies, according to Harvard Business Review, and that's a data set of about 14,000 companies, startups, fail because of internal dynamics. And that's leadership.
Niels Brabandt
Two-thirds. Two-thirds.
Logan Yonavjak
Two-thirds. I'll build on that with my own data set of about 125-plus VCs and accelerators that I've spoken to personally over the course of starting this company alone. And people have said as high as 83% in their portfolio. Most people guess two-thirds or above if you just throw it out to them as a poll. We have poll data that we've shared. So yeah, that's really an interesting I think if you crowdsource it, people kind of know that it's mostly people problems that are leading to company failures.
Logan Yonavjak
And then the third thing I would say is that when we're talking about someone saying, "Oh, it's the market," that certainly can be true. I mean, market timing is one important and critical ingredient. But that actually points to an interesting aspect of what we're measuring in our assessment capabilities, which is coachability and identity flexibility. So when someone tends to put responsibility externally, that's actually something that relates to their ability to be coached over time. And so one of the things we're looking at is patterns in someone not necessarily taking responsibility as an individual or team for something working out. So those are kind of interesting dynamics that we tease out in our capabilities.
Niels Brabandt
Excellent. And when we talk about this Founder Readiness, you often have people out there, especially motivational, inspirational speakers, who tell you it's all about the motivation or the right mindset you need to have. Do you think it's enough to be highly motivated, have the right mindset to succeed?
Logan Yonavjak
I think it's such an important ingredient, and it's something that I have to turn to often because running a startup is a roller coaster. And I do think you have to have, well, an aptitude and an appetite for uncertainty, and you have to have the mindset that this is going to work out because there are so many twists and turns.
Logan Yonavjak
However, I don't think that's enough of the equation. If you think about it in sort of a weighted average sort of way, you need a number of ingredients to be a successful leader.
Logan Yonavjak
And what we are measuring is capacity. So instead of specific skills or preferences like, "Are you an introvert? Are you an extrovert? Do you prefer to be structured or more open about decision-making?" instead of measuring those capabilities, we're looking at a person's ability to think, behave, and act under pressure with complexity over time.
Logan Yonavjak
So I'll give you an example. If you're moving into a scenario where you have to manage a bunch of new AI tools, and your leadership capacity is on the lower end of some of these constructs that we measure, you're probably going to freeze and kind of implode and potentially burn out under that pressure. And so there are ways you can improve that, but there's a baseline that we can measure in terms of your capacity to hold multiple perspectives objectively over time.
Niels Brabandt
Excellent. So when you now try to audit this, what do you think is the role of AI we can probably use or implement here as maybe an audit layer or anything like that? What do you think?
Logan Yonavjak
Well, we think of what we're doing as kind of a people insurance layer, if you will. It's like an analytical layer that's augmented by AI. And so one of the reasons we started this company is because AI is now at the point where we've trained it according to a bunch of parameters in various psychological realms. I wouldn't just go out and try to get AI to do this yourself, just kind of like a lot of other things people are using AI for. We've trained it to look at patterns in someone's speech. It's like quantitative linguistics. And so you speak into a camera for a period of time. You answer questions. We take that transcript data, and we look at patterns in how you talk about past experiences and how you talk about your team and your own individual decision-making. And we can glean a lot of insight from that. But it's AI-augmented.
Niels Brabandt
So when you speak about this complexity and what the pressure polling on founders today will be, how do you want to prepare any leader for that? Because probably no one who starts with any kind of business is ready for what's coming up there.
Logan Yonavjak
Well, I think a lot of it is so think about it as internal capabilities and an internal landscape. So there's patterns inside that you follow as an individual to make decisions or to respond to stress. And so like anything, you can train yourself to have greater capacity. And so in terms of specific ways to do that, that's what we're all about. We have coaching, and we have training.
Logan Yonavjak
But there's little things like people talk about breathwork or taking a pause. Those pauses, in accumulation, actually retrain the brain and nervous system under stressful periods. So when you're in a stress response, you're in your sympathetic nervous system. And it's really difficult to make good decisions when you're in a fight, flight, or freeze mode. And so even taking a little bit of space and training yourself to take a pause before reacting will train your nervous system over time to get into that parasympathetic state so that then you can actually make a better decision from your executive function, your neocortex. And I actually would take it as far as say it's responsible leadership to actually do these kinds of trainings for yourself so that you're not just reacting to everything that's happening to you and making, I would say, inferior decisions.
Niels Brabandt
Excellent. If now some people are listening here and they say, "OK, maybe you know the top three mistakes that people do when they start up, probably the top three people mistakes," what would you say are the most common mistakes for people to avoid?
Logan Yonavjak
In terms of leadership decisions in startups?
Niels Brabandt
Yes.
Logan Yonavjak
Well, I would start at the beginning and say actually, I wouldn't say a lot of people who want to be CEOs necessarily are ready for that role. I think that there's a lot of instances where someone has maybe a romanticized version of what it means to lead a startup. And so taking an assessment like this could help kind of make you decide if you feel like you're actually ready for this from a capacity perspective.
Logan Yonavjak
So I would say talking to people who have done startups before, doing your due diligence first, even before you make the decision. But I think one of the other things that I've noticed is, yeah, people are engineering their days for their best version of their best self. And so you want to better understand your capacity so you know when it's a low point, when it's a day that's not going well, how are you going to react in those situations? Observe yourself and really try to understand what are my trigger points? And that breathwork, that pregnant pause can really help you to, again, redirect your nervous system so it's not just in a reactive state.
Logan Yonavjak
And I think another mistake people make is taking feedback as if it's a personal affront. So the ability to be objective about feedback is one of the things that will grow your leadership capacity. Because those who are farther along in that ability, this identity flexibility, see patterns or see feedback as part of a system. And they're able to objectively look at the information as if it's just part of an ecosystem that they're making a decision around, not as a personal affront.
Niels Brabandt
Excellent. And when now people say, "Hey, I think Logan could be really helpful for us," how can people reach out to you to wrap this interview up?
Logan Yonavjak
Yes, absolutely. So we can be reached at founderready.io, founderready.io. Or you can reach out to me directly, logan@founderrl.com, logan@founderrl.com.
Niels Brabandt
Excellent. I think these are the perfect final words. Logan, thank you very much for your time.
Logan Yonavjak
Thank you so much, Niels.