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Often downplayed in the excitement of starting up a new business venture is one of the most important decisions entrepreneurs will face: should they go it alone, or bring in cofounders, hires, and investors to help build the business? More than just financial rewards are at stake. Friendships and relationships can suffer. Bad decisions at the inception of a promising venture lay the foundations for its eventual ruin. The Founder's Dilemmas is the first book to examine the early decisions by entrepreneurs that can...
Often downplayed in the excitement of starting up a new business venture is one of the most important decisions entrepreneurs will face: should they go it alone, or bring in cofounders, hires, and investors to help build the business? More than just financial rewards are at stake. Friendships and relationships can suffer. Bad decisions at the inception of a promising venture lay the foundations for its eventual ruin. The Founder's Dilemmas is the first book to examine the early decisions by entrepreneurs that can make or break a startup and its team.
Drawing on a decade of research, Noam Wasserman reveals the common pitfalls founders face and how to avoid them. He looks at whether it is a good idea to cofound with friends or relatives, how and when to split the equity within the founding team, and how to recognize when a successful founder-CEO should exit or be fired. Wasserman explains how to anticipate, avoid, or recover from disastrous mistakes that can splinter a founding team, strip founders of control, and leave founders without a financial payoff for their hard work and innovative ideas. He highlights the need at each step to strike a careful balance between controlling the startup and attracting the best resources to grow it, and demonstrates why the easy short-term choice is often the most perilous in the long term.
The Founder's Dilemmas draws on the inside stories of founders like Evan Williams of Twitter and Tim Westergren of Pandora, while mining quantitative data on almost ten thousand founders.
People problems are the leading cause of failure in startups. This book offers solutions.
"Wasserman presents a series of entrepreneurship vignettes and case studies, drawn from a massive 10,000-founder survey he created. Due to the size of this business start-up survey, several of the stories, including accounts from founders of Blogger, Sittercity, and SmarTix, should prove fresh to readers. Much of the advice in the book governs key decisions founders have to make and factors that can cause decisions to turn out well or badly. . . . [T]his work includes valuable, unique content."--Choice
"[A] uniquely valuable resource for any entrepreneur."--Terrence Murray, Financialist
"The Founder's Dilemmas can't prevent entrepreneurs from repeating the mistakes of their predecessors; we all know how well human beings learn from history. But it's a worthwhile, prudent read for anyone considering or engaging in entrepreneurship. In pointing out the patterns, the common quandaries and routes, The Founder's Dilemmas can eliminate one headache along the path of business-building."--Tamara Micner, LSE Politics and Policy blog
"The guru on this subject is Noam Wasserman, who wrote an insightful book called The Founder's Dilemmas."--Luke Johnson, BusinessDay
List of Illustrations vii
Part I: Introduction and Pre-founding 1
Chapter One: Introduction 3
Chapter Two: Career Dilemmas 27
Part II: Founding Team Dilemmas 69
Chapter Three: The Solo-versus-Team Dilemma 73
Chapter Four: Relationship Dilemmas: Flocking Together and Playing with Fire 89
Chapter Five: Role Dilemmas: Positions and Decision Making 117
Chapter Six: Reward Dilemmas: Equity Splits and Cash Compensation 145
Chapter Seven: The Three RsSystem: Alignment and Equilibrium 186
Part III: Beyond the Founding Team: Hires and Investors 205
Chapter Eight: Hiring Dilemmas: The Right Hires at the Right Time 209
Chapter Nine: Investor Dilemmas: Adding Value, Adding Risks 249
Chapter Ten: Failure, Success, and Founder-CEO Succession 297
Part IV: Conclusion 329
Chapter Eleven: Wealth-versus-Control Dilemmas 331
Appendix A: Quantitative Data 391
Appendix B: Summary of Startups and People 403
Posted December 20, 2012
Most people admire self-made men and women – the Bill Gateses and Anita Roddicks who establish successful companies and reap a multitude of rewards. However, the path to start-up success is fraught with roadblocks, detours, washouts and dead ends. Harvard Business School professor Noam Wasserman identifies the common “founder’s dilemmas” and details their short- and long-term consequences. More specifically, he exposes the tacit tension that exists between creating wealth and maintaining control. This isn’t a quick read; it’s an in-depth, intelligent analysis based on 10 years of extensive research. At times, you may find yourself wishing for a bullet-point list. Yet getAbstract encourages would-be founders, entrepreneurs and venture capitalists to keep reading: You’ll find Wasserman’s insights and solutions well worth your time – and they may make the difference between your start-up’s success or failure.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.
Posted May 3, 2012
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Posted September 3, 2013
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