The psychology behind betrayal

^{Hi! Welcome. You being here means more than you know. Knowing it lands with someone like you keeps me going. I'm Lavena Xu-Johnson. I write about psychology for founders. Why? Because scaling a business means scaling ourselves first.}

Hi founders,

Betrayal is a topic that storytellers, like writers and filmmakers, always love to illustrate, creating turning points for the protagonists. It spices up the story and creates enticing moments.

But it’s not something we’re unfamiliar with. Being betrayed is something we’ve all been through: In life, in work, or worse, in our own business – our life’s work.

There is never one reason to explain why that co-worker stabbed you in the back or how your work friend used your words against you. It always involves nuanced, multi-faceted, complex human situations we find ourselves in.

I have been lucky enough not to have major betrayals at work, although in life, I’ve had significant betrayals in close relationships that have turned my worldview upside down at times.

Betrayal is a shared human experience, and researchers have studied this systematically. Understanding their findings might just help us grieve our past experiences and be less emotionally drained going forward - it might not be as personal you think.

Let’s explore these common human traits through 4 social and psychological frameworks, using a hypothetical story I made up, which was inspired by a few founders’ stories.

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Two co-founders start a B2B SaaS company together. One runs products and operations. The other owns sales and manages client relationships directly. They split equity 60/40, with 60% to the product founder and 40% to the sales founder, and verbally agree that major decisions will be made together and, like most early teams, never write down what "major" means.

Three years in, the company is growing steadily. The sales co-founder has personally built most of the client relationships. Investors are circling and want a cleaner decision-making structure. Over the next fourteen months, the sales co-founder starts taking client meetings alone. A separate company was secretly formed with a vague description. Soon, the product founder received a note: "I need to talk about my future with you."

By the time that message arrives, the product co-founder has already lost his client base without realizing.

Now, let’s apply four research frameworks to explain what was happening on the other side.

In 1989, Denise Rousseau introduced the concept of the psychological contract in a paper published in the Employee Responsibilities and Rights Journal: the set of unwritten obligations and expectations that form between two people the moment a relationship begins (Rousseau, 1989).

The theory believes that each person has their own beliefs about what the relationship requires from both sides. They are unwritten, often unspoken perceptions, and are entirely subjective.

To test how common a perceived violation of the psychological contract was, Robinson and Rousseau tracked 128 MBA graduates from graduation through their first two years of employment. By the end of year two, 54% had experienced at least one breach of the psychological contract. The researchers paid close attention to intent. What they found was that many of the people who had made implicit promises simply did not remember making them or interpreted what they had said differently from how the recipient did. In some cases, both parties described the same early conversation and came away with opposite understandings of what had been agreed.

The breach caused real damage to trust, commitment, and intention to stay regardless of whether deception was involved. The subjective perception of violation was what drove the outcomes, not the intent behind the original exchange.

In our scenario, the sales co-founder privately believed his 40% would be renegotiated once he proved his value through client relationships, while the product co-founder was unaware of that expectation.

A breach of a psychological contract does not require deception. It’s often two people who each had a private version of the agreement, without knowing each other’s version.

In the late 1970s, John Thibaut and Harold Kelley published Social Exchange Theory, a framework based on laboratory studies of how pairs of people made decisions together under conditions of unequal rewards (Thibaut & Kelley, 1959). The core argument was that people evaluate relationships against two internal benchmarks at all times:

The standard a person carries for what they believe they deserve in a relationship, built from prior experience and observations of what others in similar positions receive. When a relationship exceeds this standard, the person experiences it as satisfying. When it falls consistently below it, dissatisfaction accumulates even if nothing dramatic has happened.

The best available option outside the current relationship. A person remains committed as long as the relationship exceeds their CLalt. When the CLalt exceeds what the current arrangement provides, the relationship becomes unstable, regardless of how the CL is met. The person can be reasonably satisfied with what they have and still be drifting.

In the original laboratory experiments, Thibaut and Kelley observed pairs of participants making decisions under varying reward conditions over time. The consistent finding was that people do not consciously run this calculation.

In our scenario, the sales co-founder's CLalt was rising continuously across years three and four: The client relationships they had cultivated were effectively portable, and he was receiving inbound interest from other organizations. The original partnership had not deteriorated, but the available alternatives had improved considerably. The calculation had already tipped before any behavioral signs. On the product founder, something was clearly wrong. To the sales founder, the calculation needed to be reworked.

Most betrayals in professional relationships do not start with bad intentions. They start with assumptions and conditions that were never previously addressed.

Next week, we'll cover the remaining two explainers: how good people rationalize their way into behaviors they'd have called inexcusable a year earlier, and how the reclassification of who counts as "us" sets everything in motion long before any behavior changes.

If today's edition resonated with you, forward it to a founder who needs it. And if you have a question or a topic you'd like me to write about, just reply to this email.

Until next week,

Lavena

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