It's likely the founder is a visionary without a pragmatic streak. Conferences and iPhones is what you give your developers when you're too optimistic about future business.

The founder is unlikely to be aware of his poor judgement. I know this, because I've made the same mistake. Tempering vision wih pragmatism is hard, especially if you achieve early success.

If your founder doesn't admit fault and put in a solid plan to turn the business around, leave.