The Hidden Tax That Will Kill Your Startup: Why Mediocre Is More Expensive Than You Think
The single biggest mistake you’ll make as a founder isn’t picking the wrong market, missing a product deadline, or even almost running out of cash (as brutal as it it)
It’s tolerating mediocrity on your team. Especially your senior team.
And I’m not talking about folks who are learning or growing into a role. I’m talking about the truly mediocre — the people who will never quite get there, who require constant management, who need to be dragged across every finish line.
We’ve all done it. I’ve certainly done it. And it’s the most expensive mistake you can make.
The Three Deadly Forms of Mediocrity
#1. The Mediocre Co-Founder
This is the nuclear option of mistakes.
A mediocre co-founder isn’t just dragging down 50% of your founding team — they’re actively destroying your company every single day. They’re in every important meeting. They’re making decisions that you have to undo. They’re representing your company to investors, customers, and recruits.
The founding team where one person was “the idea guy” and the other was “the technical one.” Fast forward two years, and one co-founder is working 80-hour weeks closing enterprise deals while the other is… well, you’re not quite sure what they’re doing.
The mediocre co-founder is expensive beyond measure because:
- They own 25-50% of your company
- They have equal say in major decisions
- They poison the well for recruiting (A+ players won’t join a team with a C co-founder)
- They’re nearly impossible to remove without blowing up the company
The fix? Don’t start companies with people you don’t deeply respect. That you don’t believe are as committed, and as good or better than you. Full stop. Friendship isn’t enough. Complementary skills aren’t enough. You need someone you’d follow into battle, someone who’s world-class at what they do.
And one simple way to ferret out issues? Agree to 10 year vesting. I call it the Founder Commitment Test. More on that here:
It almost instantly ferrets out if you are both committed enough.
#2. More Than One Mediocre VP
Here’s a rule I learned the hard way: You can carry one mediocre VP. You cannot carry two.
When you’re scaling from $2M to $10M ARR, you’re going to make hiring mistakes. It’s inevitable. You’ll hire a VP of Sales who interviewed great but can’t actually close. Or a VP of Marketing who’s all strategy decks and no execution.
One mediocre VP? You can work around it. The CEO picks up the slack. Other execs compensate. It’s painful, but survivable.
Two or more mediocre VPs? Now you’ve got a systemic problem.
Because here’s what happens: You spend 60% of your time managing the mediocre VPs. You’re in their 1:1s trying to coach them on basics. You’re redoing their work. You’re apologizing to the team for their mistakes. You’re making excuses to the board about why their numbers are red.
Meanwhile, your good VPs — the ones who are killing it — are getting 20% of your attention. And they notice. And they start to leave.
I’ve watched this pattern destroy companies. The CEO becomes a full-time babysitter for the weak executives while the strong ones quietly start taking recruiter calls.
The math is simple:
- A+ VP = 2x output, 0.25x management time
- C VP = 0.5x output, 3x management time
Two mediocre VPs don’t give you 1.0x output. They give you 0.5x output and consume 6x of your time. You’re paying six figures for the privilege of working twice as hard to get half the results.
#3. Mediocre Partners
This one’s more subtle but equally deadly.
Your go-to-market partner who generates zero pipeline. Your technology partner who hasn’t sent you a single qualified lead. Your channel partner who keeps promising they’re “almost ready” to start selling.
Mediocre partnerships are insidious because they feel like they should work. You did the press release. You have the quarterly check-ins. They’re on your website. It looks like a real partnership.
But look at the numbers: $0 in partner-sourced revenue. Zero co-selling opportunities. Nothing.
Yet somehow you keep having the partnership renewal conversation. You keep investing engineering time in the integration. Your VP of Partnerships keeps telling you it’s about to turn around.
It won’t.
Mediocre partners drain resources — engineering time, partnership management overhead, opportunity cost — while delivering nothing.
The best partnerships are force multipliers. The mediocre ones are just multiplying your problems by zero.
The Real Cost: Death By A Thousand Compromises. And a Loss of Momentum
Here’s what people don’t tell you about mediocrity: It’s not that mediocre people fail spectacularly. It’s that they fail slowly, quietly, and expensively.
A mediocre VP of Sales doesn’t lose all your deals. They lose 40% of them — the ones you should have won. So you’re not sure if it’s them, the market, the product, or just bad luck.
A mediocre co-founder doesn’t make obviously terrible decisions. They make slightly suboptimal decisions, consistently, across thousands of micro-moments. Death by a thousand paper cuts.
A mediocre partner doesn’t blow up your product. They just never quite deliver what they promised. And you keep waiting. And waiting.
The energy drain is the real killer.
Every conversation with a mediocre team member requires you to:
- Lower your standards temporarily
- Accept subpar work
- Make excuses (to yourself, to the team, to the board)
- Rationalize why you haven’t made a change yet
- Redo or fix their work yourself
Do this across multiple people and multiple issues, and suddenly you’re running a company at half-speed with twice the effort.
The Upgrade Mentality
The best founders I know have what I call an “upgrade mentality.”
They’re constantly asking: “Is this person/partner/relationship making us better or just keeping us busy?”
- If your VP needs extensive hand-holding on every deal, they’re keeping you busy.
- If your co-founder needs to be convinced to work hard, they’re keeping you busy.
- If your partner needs constant “strategic alignment” meetings that go nowhere, they’re keeping you busy.
Busy is not the same as better.
The upgrade mentality means:
- Hiring people better than you, always
- Moving on from mediocre partnerships quickly, not slowly
- Having the tough conversation with your co-founder before you raise Series A
- Replacing your mediocre VPs within 12 months, not 36
The One Thing You Can Control
You can’t control the market. You can’t control the competition. You can’t control when the next recession hits or when your biggest customer churns.
But you can control who you work with.
And yet, this is where founders get softest. We make excuses:
- “They’re improving”
- “They’re a culture fit”
- “We have history together”
- “I don’t have time to recruit right now”
- “Better the devil you know”
All of these are expensive lies we tell ourselves.
The truth? Every day you tolerate mediocrity is a day you’re not building a great company.
What To Do Right Now
If you’re reading this and thinking “Oh shit, I have a mediocre ___,” here’s your action plan:
- For mediocre co-founders: Have the conversation this week. Not next month. This week. Either they step up dramatically, transition to an advisor role, or you need to consider more dramatic options. At minimum, get a vesting schedule in place if you don’t have one.
- For mediocre VPs: Give them 90 days with crystal-clear metrics. If they don’t hit them, you both know what happens. Start recruiting their replacement on day 1. Hope they succeed, plan like they won’t.
- For mediocre partners: Kill it this quarter. No extended trials. No “let’s give it one more quarter.” If it’s not working after 6-12 months, it’s never working.
The Bottom Line
The cost of mediocrity isn’t the mediocre performance. It’s the opportunity cost of what you could have built with truly great people.
Every hour you spend managing the mediocre is an hour you didn’t spend:
- Recruiting A+ players
- Closing strategic customers
- Building great product
- Thinking strategically about the business
You cannot build a great company with mediocre people. Not as co-founders. Not as executives. Not as partners.
You just can’t.
And the sooner you accept that truth — really accept it — the sooner you’ll have the courage to make the changes you already know you need to make.
The upgrade always costs less than you think. The delay always costs more.
Stop managing the mediocre. Start building with the great.
Your future self will thank you.
