on March 16, 2012
As an entrepreneur, I read a ton of books about startups. Most of them are pretty entertaining, but I've always felt hesitant actually implementing any of what I read. For the most part, the advice tends to be something along the lines of "I started this company when I was 14 with $50, and now's it's a $1bn company and here's how I did it- you should do the same." Umm, yeah, but does that apply to MY startup?
The Founder's Dilemma's is different. By drawing on some serious research (serious, like, crazy 10-year datasets on entrepreneurs and their companies), Wasserman identifies the key "decision points" any startup faces and then proposes different solutions. Two of my favorite "dilemmas" were 1. How should I split equity with my co-founders? and 2. Should I even have a co-founder?
These are interesting questions, but you can really bank on the proposed solutions because they're based on empirical data. Very few startup books I've read go this far.
This is definitely a lengthy book that requires a decent time investment, but after reading all the one-liners in tech blogs and exaggerated advice other startup books, reading this was super refreshing and just amazingly helpful. Founders, don't miss out!
on March 17, 2012
Noam Wasserman teaches a class called "Founder's Dilemmas" at Harvard Business School that has become a "must-take" session for aspiring entrepreneurs. This book is the outgrowth of Noam's research and that class. It outlines a series of make-or-break decisions that founders make when embarking on their ventures. Noam analyzes the fundamental trade-offs such as when to found a company, who to found it with (if anyone), how to determine roles and responsibilities, equity splits and many more sensitive issues.
This is a serious book for a serious endeavor: creating a company from scratch that can be a world-beater and life-changer. Analytical, insightful and even a bit wonky at times, Wasserman's story arc is less about war stories - although the books is chock full of them, featuring the founders of Twitter, Pandora and others - and more about the decision tree every founder must climb. Rather than having these decisions happen by chance, Wasserman's book is a towering guide to making these decisions thoughtfully and purposefully.
Every founder should read it - and take the time to digest its rich data and lessons.
on March 16, 2012
What I like most about this book is the hard analytical analysis of the key decisions that a founder faces when launching a new venture. I read a lot of books on entrepreneurship and none come close to this in terms of quantitative detail to back up key recommendations. That alone would make it a great book, but Wasserman also addresses the softer, qualitative side of entrepreneurship and shows how it fits into the big picture.
I think you'll find that Founder's Dilemmas is an incredibly valuable addition to the literature on entrepreneurship that you will find yourself referencing on a regular basis whether you're a founder, early employee, investor, business person, government official or just overall fan of entrepreneurs.
on March 16, 2012
I've been teaching Noam's material at the MBA level for a couple of years now. The course is very popular because it addresses some of the key issues students - or any founders - face when starting a company. It seems that most of what is written is about how to build a business plan, how to choose a business model, etc. But this book is all about the TEAM.
Of course there is no shorter of bloggers and ex-entrepreneurs who will tell you their opinion, or their personal story, of what they think should work. What Noam has done here is conducted real research to get beyond anecdotes and case studies to more general patterns. But he introduces the topics with familiar examples that set the stage for the quantitative analysis.
What I think is most important about this book is the blind spots it identifies. Too many entrepreneurs give these issues short shrift until it is too late - until they have painted themselves into a corner. I'm quite sure this will be required reading!
on May 6, 2012
The Founder's Dilemmas by Noam Wasserman is another book that belongs on every entrepreneur's bookshelf. It's excellent.
I met Noam for the first time last week when I was at HBS. I was on a panel of VCs (me, Mike Maples Jr., Kate Mitchell, and David Frankel) talking to a room full of HBS alumni who are VCs. Noam and I had exchanged several emails over the past few months and he sent me a review copy of the book but it got lost in my infinite pile of books to read. After seeing him and talking to him briefly, I decided to put it on the top of the stack. I laid on the couch all day yesterday with Amy and the dogs and demolished a pair of books. The Founder's Dilemmas was the first.
I get asked endless questions about founder dynamics, solo founders, optimal number of founders, equity allocations between founders, roles of founders, alignment between founders, and investor - founder relationships. I've been involved in many conflicts between founders, transition in roles between founders, emotional struggles with founders as businesses grow and change, investor conflicts (other than me) with founders, and the list goes on and on and on.
I've never seen a book before that was particularly helpful - to a founder - about the wide range of issues a founder will face. There are plenty of books lots with stories, anecdotes, and suggestions, but none that are particularly systematic about going through all of the issues. Noam's book is the first I've read - and he totally nails it.
He covers it three ways - with data, with analysis, and with stories. He's done a ten year quantitative study that he follows up with his own analysis and then intermixes this with actual stories from a set of founders, including two that I know reasonably well - Dick Costolo (FeedBurner - I was on the board), Genevieve Thiers (Sittercity - we looked hard at investing but ultimately didn't) and many I know from a distance. As a result, I was able to back test the stories and anecdotes and they were completely factual in contrast to many other books like this where the qualitative stories are embellished to fit either the ego of the participants or the point being made by the author.
Noam systematically marches through all of the major dilemmas I could think of for founders: career, solo-vs-team, relationship, role, reward, hiring, investor, failure-vs-success, founder-CEO succession, and wealth-vs-control. I believe he'll coin several new reference phrases, including my favorite around wealth-vs-control ("do you want to be king or want to be rich?") He looks at each of these from all sides (e.g. yes - you can be king and rich, but there are other options that may get you where you want to go faster and with a much higher chance of success) and uses a great blend of data, analysis, and anecdote to make and support his points.
If you are a founder, or considering being a founder, a board member, or an investor, buy The Founder's Dilemmas right now. One of your goals should be to do everything you can to maximize your chance of success. This book will help a lot and you won't regret the time you invest in it.
on December 12, 2013
The Founder’s Dilemmas is at the same time a fascinating and frustrating book. Fascinating because it’s providing very seldom seen (and mostly unknown) data about founders and high-tech start-ups. Frustrating because it is also seldom providing answers to the dilemmas founders may face. It took me the full reading of the book to finally understand that the answer Wasserman provides is that there is no best solution for a founder facing a problem, but that if he knows all possible situations, he might better decide based on his own motivation and … personality. So she or he might decide, not on rational criteria but more because of his personal inclinations!
The best illustration of this is Evan Williams who was a founder of Blogger, and then of Odeo (and then after the book was designed of Twitter). Williams had a very different behavior with the two start-ups. He was “control-oriented” with Blogger, hiring people in his close network, taking friends and family (and close network) money only and keeping management control to the point of firing everyone including his former co-founder and girlfriend. With Odeo, he had initially a “wealth-oriented” attitude, taking VC money and having a different hiring strategy. His inclination made him however buy back his investor’s stake, as he needed to control his start-up again.
Wasserman shows that the “3Rs” (Relationships, Roles & Rewards) are key features for decisions about the key dilemmas founders may experience. These dilemmas are classified according to the chapters of the book: Career, Solo-vs.-Team, Weak vs. Network, Positions, Compensations, Hiring, Investors, and Succession. Wasserman explains (or better-said describes) the various dilemmas founders face when taking decisions and shows that their decisions are very often dependent upon their motivation. Do they want to be Kings (power or control-oriented) or Rich (wealth oriented)? He does it with anecdotes (not so good and quite well-known) and with statistics (very good and not so well-known)
In summary I saw it more as a book for academics than for entrepreneurs and founders who apparently will not take better decisions after reading this book as they will be driven by their motivations, not their experience! At least they will be aware of it. It may be another illustration that youth and enthusiasm are as important as experience and rational behaviors!
One interesting puzzle Wasserman addresses is why individuals decide to become entrepreneurs, often thinking that they will become wealthy whereas this is entirely wrong. This has to do with control vs. wealth. You will need to read Wasserman if you want to know more.
on March 16, 2012
I'm a venture capitalist in silicon valley and wish every founding team read this book before founding their company. This is a seminal read on how to found companies, how to assemble your founding team, how to divide the equity, etc. I've seen so many startups make mistakes up front that kill a great opportunity. The author has done a great job here at laying out the realities of what the key early decisions mean for your company.
on June 20, 2012
Wow, what a fantastic book. For a startup venture this is to entrepreneurship what Porter's five forces are to strategy. I think its destined to be a classic and, no surprise, its from another Harvard professor. The writing style is very good. You'll be hooked from the opening sentence to the final conclusion. It is an exhaustive study of over 10,000 entrepreneurs and includes detailed scenarios, anecdotal stories and specific flowcharts for how to anticipate and deal with the most common and daunting dilemmas that any founder will face. Tons of solid advice and great takeaways.
It is a must read for anyone thinking of starting a new venture, currently in the thick of a startup or who invests in startups. Heck, even if you're marketing to or purchasing from a startup, the insights in this book could be invaluable for assessing the team and their viability as a customer or vendor to your firm.
I wish I had this as a resource when I quit my job in 1983 to start my first business.
Noam Wasserman will be a guest on my podcast The Free COO on Thursday, June 28, 2012. [...]
on March 19, 2012
A fact-based yet fun book on the challenges (and opportunities) of founding a business, The Founder's Dilemmas is well positioned to be the go-to book for entrepreneurs (and people in the entrepreneuriam ecosystem) to think about, and prepare for building businesses that will act as the foundation of the innovation economy.
This book is a must read for entrepreneurs who are looking to build successful businesses, both large and small. For first time entrepreneurs, Noam Wasserman lays out the most common pitfalls that entrepreneurs fact head-on, both from his experience working in the field (with some fun anecdotal stories) but also based on analytical, real research. Unlike some other books that use anecdotes to then assume the whole, Noam does a great job laying out real evidence based off of his experience at HBS, and surveys + data that have come out of deep research. With that said, as a venture capitalist, it's uncanny for me to see how many of these pitfalls face entrepreneurs that I look at at various points of a business's maturation cycle. The book really ties real-life experience with real-life research.
What I appreciate most about The Founder's Dilemma is that it while it's reinforced with real data, at the end it's a clear, tactical roadmap for the next generation of entrepreneurs looking to build large, impactful, sustainable businesses. The book not only highlights areas of challenges / identifies blind spots, but provides tactical steps to help entrepreneurs navigate these issues before the fact.
I'm going to strongly recommend this book to not only entrepreneurs (first-time and repeat) I meet, but large-company employees, investors, and folks in any sector (non-profit and government come to mind) where innovation and successful start-up mentalities define the winners over time.
on March 16, 2012
I read an early draft of "Founder's Dilemmas" and was amazed by the depth of content and data-rich approach taken by Professor Noam Wasserman.
The ideas discussed in the book are incredibly important for anyone involved in company formation--be it founders or investors. Indeed, the decisions made early-on in a venture have long-lasting implications (i.e how to split equity among founders, whether to bring on additional founders, etc.). They form the concrete foundation of the enterprise. Without a solid foundation, over time cracks appear which affect the strength of the structure and are difficult and expensive to fix.
The book is chock full of practical and usable advice--advice which if followed, will minimize many of the challenges that founders often encounter.
In sum, The Founder's Dilemmas is a vital, original and welcome addition to the body of entrepreneurship literature.