Locus of control is a psychological concept that defines how you view your relationship with the world. It measures the degree to which you believe you have authority over the outcomes in your life.
It was developed by Julian Rotter in the 1950s. It asks a simple question about agency.
Do you believe you are the primary driver of your success and failure? Or do you believe that external forces like luck, fate, or other people determine what happens to you?
For a founder, where you fall on this spectrum dictates how you hire, how you pivot, and how you handle a crisis.
Internal vs. External
#The concept is split into two distinct categories.
Internal Locus of Control People with a strong internal locus believe that events result primarily from their own actions. If a sales pitch fails, they analyze their slide deck or their delivery. They believe they can influence the outcome of almost any situation through effort and skill.
External Locus of Control People with a strong external locus attribute outcomes to outside forces. If a sales pitch fails, they might blame the economy, the mood of the investor, or bad timing. They tend to believe that life happens to them rather than being created by them.
Most entrepreneurs naturally lean toward the internal side. Building a company requires a belief that you can change the status quo.
The Founder’s Dilemma
#Having a high internal locus of control is generally seen as a prerequisite for entrepreneurship. You need the audacity to believe your actions matter in a chaotic market.
However, this strength can become a liability.
If you believe you control everything, you may struggle to delegate. You might think nobody else can influence the outcome as well as you can. This leads to bottlenecks and stalled growth.
Furthermore, an extreme internal locus can lead to severe psychological distress. When a startup fails due to a market crash or a global pandemic, the founder with a high internal locus often blames themselves. They cannot separate their effort from systemic issues.
On the flip side, leaning too far toward external locus is dangerous for a leader. It breeds passivity. If you believe the market decides your fate regardless of your work, you will stop innovating.
Calibrating Your Perspective
#Success in a startup environment requires a fluid relationship with control. It is not about being 100% internal or 100% external.
It is about distinct categorization.
You must have an internal locus regarding your product quality, your team culture, and your daily operations. These are things you can touch and change.
You must adopt an external locus regarding macroeconomics and competitor behavior. You can respond to these, but you cannot control them.
When you face a blockage in your business, ask yourself which bucket the problem falls into.
Are you trying to control the weather? Or are you just refusing to build a shelter?
The goal is to maximize your agency over your inputs while accepting the variance of the outputs.