Why the Endowment Effect Holds CEOs Back

We all do it.

We cling to jobs, identities, products, even leadership approaches long after they’ve stopped serving us.

It’s a cognitive trap known as the Endowment Effect where we overvalue what we already own.

And as Marshall Goldsmith reminds us in What Got You Here Won’t Get You There, the habits that powered your ascent can derail your next chapter.

Here are three powerful examples of female founders who didn’t succumb to the endowment effect and exactly what they did to break free, pivot, and rebuild stronger 👇

Whitney Wolfe Herd (Bumble): Expanding Beyond the First Win

The Endowment Effect can make a founder stick to the playbook that worked in year one, even when the market’s moved on.

For Whitney Wolfe Herd, that was Bumble’s female-first dating app.

• The model was fresh

• It grabbed market share

• It got Bumble to a multi-billion-dollar IPO

But by early 2025, cracks showed.

Revenue dropped 7.6% year-over-year (from $268.6M to $248.2M in Q2), growth had stalled and paying users fell 8.7% to 3.8M.

In March 2025, Whitney returned as CEO with a plan:

• Cut $100M in costs

• Reduce headcount by 30%

• Pivot toward Bumble BFF: expanding from dating into friendship and community

The acquisition of Geneva gave them the tech to combine groups, events, and messaging into a stickier, more social experience.

The shift reframes Bumble from “a dating app” to “a platform for all relationships”, opened bigger markets and diversified their revenue.

Takeaway: The Endowment Effect tells you to keep defending the thing that made you famous. The leaders who last find the next big market before the old one runs out of steam.

Anne Wojcicki (23andMe): Reinventing Through Radical Ownership Shift

The Endowment Effect hits founders hardest when the thing that made them famous becomes the thing holding them back.

For Anne Wojcicki, that was 23andMe’s direct-to-consumer DNA kit business.

It had been the rocket fuel.

It took the company public at a $3.5B SPAC valuation and peaked near $6B.

But…

• Demand slowed

• The one-off kit model failed to produce recurring revenue

• A 2023 breach affecting 7 million users destroyed trust and cost $30M in settlements

By March 2025, the company had filed for Chapter 11 bankruptcy.

Most founders double down on what’s familiar at this point but that’s the Endowment Effect in action.

Anne didn’t.

She stepped away as CEO, formed a nonprofit (TTAM Research Institute), and outbid pharma giant Regeneron with a $305M offer to buy back the company’s core assets.

The acquisition wasn’t just about ownership. It signalled a strategic reset:

• Moving from a one-off consumer product to a mission-led data and research business.

• Building partnerships with pharma and healthcare organisations for long-term revenue streams.

• Rebuilding consumer trust by operating under a nonprofit structure focused on science, not quarterly earnings.

The market responded and shares jumped 18% after the court approved the sale.

Takeaway: The Endowment Effect makes you cling to the product, process, or identity that built your success. Sometimes, the boldest move isn’t defending it, it’s tearing it down so you can rebuild for what’s next.

Sara Blakely (Spanx): Escaping the One-Product Trap

The Endowment Effect shows up when the thing that made you rich becomes the thing that keeps you small.

For Sara Blakely, that was shapewear.

She built Spanx from her apartment with $5,000 in savings.

It went global.

She became the youngest self-made female billionaire.

But categories mature and competitors flood in.

And a “we’re a shapewear company” mindset would have locked Spanx into slow decline.

Blakely saw it coming so…

• She expanded Spanx into activewear, denim, leggings, loungewear, and menswear.

• She built a strong direct-to-consumer channel early, reducing reliance on department stores.

• Every new product tied back to the core mission - making people feel confident and comfortable, not just chasing revenue.

By 2021, the payoff was clear.

Blackstone bought a majority stake at a $1.2B valuation, more than doubling earlier market estimates.

Blakely stayed as Executive Chairwoman and celebrated by gifting all 750 employees $10,000 and two first-class tickets.

Takeaway: The Endowment Effect tells you to protect your hero product at all costs. The leaders who win protect the mission and let the product evolve.

How to Kill the Endowment Effect in Your Company

1. The “Would I Buy It Today?” Test

Look at every major asset: product lines, team members, marketing channels, processes.

Ask yourself: If I didn’t own this today, would I buy it for what it’s costing me?

If the answer’s no, you’re in Endowment Effect territory.

2. The “One Step Further” Drill

For every core thing you’re attached to, ask: If I had to 10x this, how would I do it?

This forces innovation rather than protectionism.

3. External Audit Team

Once a year, get 3–5 smart, external people to review your business and tell you what they’d cut, change, or double down on.

They don’t share your emotional baggage which means they’ll see the truth faster than you will.

A Challenge For You This Week:

• Pick one underperforming thing you’ve been holding onto

• Give it 90 days to either prove it can be revived (with clear KPIs) or get cut entirely

• Reallocate that time, money, and energy into your highest upside opportunity

MY TOP FINDS OF THE WEEK 🏆

For Your Performance

• Behind the scenes: why Manchester United have completed revamped their training round for performance & culture (Link)

For Your Team

• Nick Saban’s phenomenal insight into what you can do to coach your team to perform at a high level (Link)

For Your Health

• An athlete nutrition guide for those chasing peak performance (Link)