Free riders in startups and how this impacts businesses

Free riders put your startup at risk and are very good at it!

I suspect, under the Great Resignation, free riders were very happy while flooding startups and corporations.

Free riders exist!

Until now, I never worked for a company where I didn’t identify free riders. Even in small-sized startups at least one is there to set the stage.

The truth is they can be very charming, smooth talkers and know all the tricks to get unnoticed for a long time. 

That period determines the size of the effect they will actually have. 

A free rider knows how to act busy and has all those great excuses prepared in advance. It’s second nature. 

Founders don’t know it all

Sometimes they trick the founders, acting like their best friends, making them feel understood and less alone. Sometimes they rely on the founder’s empathy to feed the right stories. 

Being a free-rider is a developed survival mechanism, and if we study a bit of evolutionary psychology, we’ll see that they are part of the surviving categories of people. Well, yes, they learned to ride along.  

You, as a founder or co-founder, have many things on your plate. In a startup environment, there is always chaos, even if you’re in the growth stage. New people, clients, revenue coming, more stakeholders, and product development are only a few distractions from your people.

Free rider spotters

Those who spot them first are the key performers, and they are not at all happy. 

You would think they’ll act on it.

No, they often don’t, with one exception.

They get frustrated, then demotivated, then alienated till they leave. The ecosystem changes and more free riders will start to replace the performers until no one is there to do the job well. 

Imagine this is sales and senior roles.

Co-founders can be free riders!

This is a frightening thought, and yet, it’s possible. These days you can hook up with a co-founder to create a more appealing startup.

It could be a friend, someone from your entourage you liked, or someone found in a startup environment where co-founders are matched.

One of the main reasons to have a co-founder is to split burdens and get qualified ownership in complementary skills. Investors love co-founders too.

They might look good on paper and have great social skills, but after some months, you finally notice they actually don’t produce a thing.

What should you do to avoid free riders?

The only way to avoid this is to set up a frame where such behaviors can be spotted, and it’s safe to do so.

If you talk but don’t take continual actions through internal company rituals, the results won’t change.

Promoting Reciprocity

“The theory of reciprocal altruism is the leading evolutionary explanation for the evolution of cooperation among genetic non-relatives. If your “altruism” is not reciprocated, then you will have maladaptively paid a cost for no benefit.”

Gad Saad – Evolutionary Psychology in the Business Sciences

Continuous reciprocity strategies in smaller groups work the best. In large groups, free riders infiltrate much more easily and find different ways to create the needed confusion that hides their inaction.

Fair compensation

High achievers should be paid the best. It’s a no-brainer but not always the case. Especially those not related directly to bringing in the money are often disadvantaged.

The way to keep cooperation and motivation for the productive ones you need to use hierarchies. In the current environment, this is highly controversial, but this is how humans evolved. You cannot rewrite centuries of history in some decades and expect things to go well. And during the time, this was already proved as the most efficient way for survival and innovation.

It’s also the most transparent way to discourage free riders and keep your best people around.

“Experimental and field evidence from all types of societies – from hunter-gatherers to Western business organiza-tions – attests to the universality of the free rider problem: when group members have the opportunity to acquire the free rider advantage, many will do so, as long as they do not expect to get caught.”

Albanese and Van Fleet 1985; Kidwell and Bennett 1993; Ostrom 1990; Andreoni 1988; Fehr and G€achter 2000; Price 2006a

Unchecked behavior always leads to free riders

There are the exceptions, the strong, amazing ones. But free riders wear out even the best ones after a while.

Humans seek benefits and are not essentially masochists. If they don’t see an advantage in working more, no matter where they are in a remote setting eventually will phase out.

No one loves to be exploited.


When a startup is in a growth-stage mood, meaning: things are rapidly moving, prosperity is on the rise, and things to handle left and right, free riders are attracted to infiltrate such environments. 

They get on the hiring wagon and impress by a well-prepared image. It’s also true for established corporations where it’s much easier to hide. 

Unspotted, they will only leave the scene after they devoured all the goodies and are too many to survive.

Cristina Imre – The Founder Coach That Takes Your Success to Heart!