A Cautionary Tale for Startups

December 5, 2025

Start-ups love the idea of innovation, agility, and fearless thinking. Yet it is amazing how quickly all that brave, forward facing energy evaporates the moment someone asks a simple question like, “Can you show me where that tax rule comes from?” Suddenly the room goes quiet, the temperature shifts, and you would think someone had accused the Pope of tax fraud.

This happened recently when someone confidently declared that HMRC has no written rules on PAYE status for directors. A bold claim, considering HMRC practically lives for writing rules. When politely challenged to provide the source, they insisted there was nothing to check. No rules. No guidance. Nothing. I managed not to let my bottom jaw drop: anyone who has ever opened the gov.uk website knows this is like denying that the ocean comprises a lot of water…

What followed was a classic case study in fragile professionalism. Instead of saying, “I will verify that,” they took it personally, went defensive, then emotional, then quietly packed up their bruised ego and carried it straight to the founder. Suddenly we were no longer talking about tax laws. We were talking about feelings. Very delicate, very important feelings. They were so upset at being questioned that they were considering leaving…

The founder, already nursing their own insecurities because the technical director knows more about certain aspects of the business that they do, apparently slipped straight into sympathy mode. Not for the person trying to verify that the company follows the law, of course. Sympathy only ever goes one direction in these dynamics: towards the person with the loudest wounded pride. Before long, the narrative had flipped from “Let us check HMRC guidance” to “Someone is speaking down to me” which is the battle cry of every leader who hates being questioned.

Psychologically this is textbook group behaviour. When one person in a team asks for clarity or verification, especially in front of others, the rest of the group reacts not to the facts but to the implied challenge. The person asking for information becomes the troublemaker purely by being the only adult in the room. Meanwhile, the one who made the unverified statement becomes the victim, even though they triggered the entire mess by refusing a basic request for evidence.

This power inversion is dangerous in a start-up environment. When founders and senior officers prioritise ego over accuracy, they create an atmosphere where people avoid speaking up. Managers and staff stop asking questions because they do not want to be labelled difficult. They stop raising concerns because they do not want to be painted as disrespectful. Before long, misinformation turns into operational decisions. Those decisions turn into regulatory breaches. Those breaches become liabilities. All because someone did not want to look something up.

Another implication is the quiet erosion of trust between staff. When one person sides with someone simply because they share a professional title or a church pew, that bypasses critical thinking entirely. It substitutes actual governance with cosy familiarity. It also unintentionally signals that facts matter less than feelings, and that expertise will always be trumped by hierarchy. That is not leadership. That is group psychology at its worst.

These behaviours show up in many companies. The confident person who is used to being the smartest one in the room struggles when someone else comes with better data. The founder who sees any correction as an attack on their authority starts viewing colleagues’ input through a lens of disrespect rather than collaboration. The team slowly rearranges itself around those sensitivities, becoming quieter, blander, and less effective. No one wants to be the next troublemaker.

And yet the solution is disarmingly simple. Check your facts. If someone asks for the source of a rule, provide it. If you are not sure, say so. If another colleague raises a valid point, hear it, even if your pride does not like it. Professional integrity requires verification, not vibes. Competence is not diminished by saying “Let me double check.” In fact, it is strengthened by it.

Start-ups cannot afford ego driven decision making. They cannot afford employees who cling to unverified claims because admitting uncertainty feels too heavy. They cannot afford a culture where the person asking for clarity is framed as the enemy. They especially cannot afford leaders who prefer protecting their own image over protecting the company’s future.

If there is one lesson here, it is this: in any organisation, the real dangers come from the person who tells you not to ask questions or worse, the person who expects their statements to go unchallenged simply because they have a few letters after their name. Qualifications are useful, yes, but they are not divine authority and does not magically override the need for evidence or being professional enough to say “let me check that and get back to you with the information”. It does not grant a permanent exemption from scrutiny. And it certainly does not mean the rest of the board should sit quietly and nod like dashboard ornaments.

The moment someone says, “You shouldn’t question this because of my title”, the whole organisation is already sliding into a ditch. Titles are not a shield against accountability. A professional designation is supposed to reflect competence, not replace it. Yet some people wear theirs like a velvet cape and get offended when anyone has the audacity to ask, “Where did that rule come from?”

That mindset does not create trust. It creates intellectual laziness. It encourages blind acceptance instead of informed decisions. It teaches junior staff that challenges are insubordination. It teaches senior staff that confidence matters more than accuracy. And that is exactly how start ups end up making catastrophic decisions based on nothing more than ego.

So yes, by all means respect expertise. Respect training. Respect someone’s experience. But do not confuse any of those things with infallibility. No employee, no matter how well qualified, should be above being asked a simple question. If a statement cannot survive being checked, it was never a strong statement in the first place.

And for the love of sanity, always check your facts, including those shiny qualifications. I once asked someone in a networking group how long their newly announced PhD had taken. They smiled proudly and said, “It was really hard work, nearly two weeks.” I had to work very hard to keep my face from saying exactly what my brain was screaming…

References and suggested further reading
Keltner, D. The Power Paradox
Janis, I. Victims of Groupthink
Argyris, C. Overcoming Organisational Defences
Cannon, M. and Edmondson, A. Failing to Learn and Learning to Fail Intelligently