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The Founder′s Dilemmas - Anticipating and Avoiding the Pitfalls That Can Sink a Startup (The Kauffman Foundation Series on Innovation and Entrepreneurship)

4.03  ·  Rating details ·  1,973 Ratings  ·  79 Reviews
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 ventur ...more
Hardcover, 448 pages
Published March 27th 2012 by Princeton University Press (first published January 1st 2011)
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Brad Feld
May 06, 2012 rated it it was amazing
Shelves: business
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
...more
Carlos Rodarte
Sep 10, 2012 rated it it was amazing
Shelves: business
My expectation for The Founder's Dilemmas was pretty high as a result of having just read several of Professor Wasserman's publications, including "Stewards, Agents, and the Founder Discount: Executive Compensation in New Ventures."

The book explores key decisions faced by startup founders throughout the life of a company ... from pre-founding, funding options, initial team and transitional hires, salary negotiations, board management, to exit. I especially liked Wasserman's explanation around th
...more
Atila Iamarino
May 21, 2017 rated it it was amazing
Um ótimo apanhado do que startups passam nos primeiros anos. O autor trabalha em cima de um banco de dados de milhares de empreendedores e empresas entrevistados ao longo de anos, para chegar em um cenário bem explicado ao longo do livro. Quem cria uma empresa precisa se decidir desde o começo o que quer priorizar: controle ou lucro. Quanto mais priorizar continuar dono da empresa e ter controle sobre decisões, menos ela tende a valer a longo prazo. E se quiser fazer dinheiro, vai precisar abrir ...more
Shannon
Mar 23, 2012 rated it really liked it
Shelves: business
If you are thinking about founding a business, or you are a founder of a business, I highly recommend checking if your library has this book. From Harvard Business School, Wasserman has studied the social and economic dilemmas and decisions of start-up founders for 10+ years, and in this book he gives us exquisite data on the results. Wasserman focuses on tech start-ups and businesses in the life sciences, but this book applies to all business founders if you read around the tech details and loo ...more
Athan Tolis
Nov 09, 2016 rated it liked it
Shelves: startups
“The Founder’s Dilemmas” comes recommended by relevant authors Brad Feld, Eric Ries and my former classmate Jeff Bussgang, all of whom really know what they are talking about.

It’s rigged up as a parallel structure between serious statistical research and anecdotal stories that are meant to guide you, the entrepreneur, in the early decisions that stand to influence the future success of your business.

So you get told “Evan next decided he would only hire junior developers via Craigslist” and then
...more
Vadim Sviridovich
May 27, 2017 rated it really liked it
Shelves: entrepreneurship
В книге ученого из Гарварда представлены результаты научных исследований американских высоко-технологичных и биомедицинских стартапов. Подробно рассматриваются вопросы мотивации учредителей, анализа имеющихся и необходимых для создания компании ресурсов (человеческого, социального и финансового капиталов), а также способов и стоимости их привлечения. Проводится анализ жизненного цикла стартапа, а также доминантных проблем, возникающих на каждом этапе его развития.
Maisha Hoye
Mar 13, 2017 rated it it was ok
I thought I would relate better to the stories but my dilemmas didn't really apply.
Cole Simmons
Jul 28, 2016 rated it really liked it
Coming in to starting my own company, I figured there had to be right answers. A right way to do things. And if you did things just in that manner, your chances of success would be significantly higher.

Boy was I wrong, and this book is what highlighted it. Compiled from the author's extensive research and data set of thousands of startups since the start of the millennium, he is able to draw conclusions about the dilemmas founders face, the possible paths, and what kind of outcomes they lead to.
...more
Mihai Cozma
Feb 17, 2017 rated it really liked it
Interesting but overrated. It is very specific to only a few startup types, it stretches statistics too much at times and, while its main idea is great and worth remembering, it could have been explained just as well in half the page number or even less.
Tigran Mamikonian
Feb 10, 2015 rated it really liked it
Quite instructive book about different stages of startup development with plenty of examples and statistical data.

The central theme of the book is so called RICH or KING dilemma. Which refers to two basic types of founders - motivated to get profit (RICH), or motivated to control and creation (KING).

Of course there is a middle point to which author refers as "Ideal entrepreneur".

The book is longer than it could be, however I'd recommend it for reader who would want to dig deeper in this area. An
...more
Josh Steimle
Jun 25, 2012 rated it really liked it
This is a great addition to data-driven literature that can truly help entrepreneurs. It covers basics every entrepreneur should be aware of, like the perils of setting things up the wrong way at the beginning. But rather than just being the pontifications of someone who has been there done that, it's real data, showing the probabilities of things working out well or poorly depending on choices made during the founding process. Along with Founders at Work, Four Steps to the Epiphany, and Venture ...more
Pavel
Jul 29, 2012 rated it it was amazing
Very good book, easy to read given the topic. Mostly based on research, and where not, is clearly stated.

The book covers a lot of grounds for startups from co-fouding, to hiring first people, getting investors, and selling the company. The book goes over the decisions founders will face and how they affect long term value or control of the company.

I would not recommend an eBook. There were a lot of footnotes and end of book notes, some of which I felt were really important. Having the book in eB
...more
Luke Kanies
Apr 10, 2012 rated it liked it
This is probably a great book for someone thinking of starting a company, but useless for someone who has. And even then, it should have had a lot more information. It presented problems, but very few useful tools for solving them.
Eric
Jun 24, 2017 rated it really liked it
An interesting book to induce thinking about founding a company.

The quantitative analysis is interesting and quite to the point. It becomes tedious to read after some point, but the book is short enough to complete before getting to dull with quant talks.

I appreciate and recommend reading the conclusion as an excellent summary of the whole book. The conclusion also scopes the book very well (North America, high-tech and life science domains), with warnings on generalizing the results too freely.
Scott Wozniak
May 24, 2017 rated it liked it
This is a good book for founders of tech or life science companies who are planning to use investor funding. Yes, that's pretty specific. And if that's not you, probably not worth your time. But if it is you there is a wealth of case studies and principles to help you decide how to allocate equity, defining your role as a founder, etc. Ultimately, he focuses on the tension between being king (having control over the company) and being rich (making as much money as you can).
Snorre Garmann
Jun 02, 2017 rated it liked it
This was a very relevant book, on a relevant subject, and the author surely did proper research. So I am sad to say that I found it a struggle to get through. I don't think there is a single page in this book I didn't have to read twice.
Travis
Jun 18, 2017 rated it really liked it  ·  review of another edition
It's sometimes difficult to tie academic research to a topic as emotionally driven as founding. Noah does a good job and his frameworks for evaluating major decisions are helpful.
Herve
Dec 12, 2013 rated it liked it
The Founder’s Dilemmas – The Answer is “It depends!”

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 proble
...more
Ronald Mcconico
Apr 18, 2016 rated it it was amazing
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 entr ...more
Jake Desyllas
This book usefully outlines key questions facing business founders, such as: are you going to start solo or with others? If with others, how will you split equity? Should you seek funding from investors? Wasserman outlines the potential impact of choosing each option for these dilemmas and also provides statistical evidence on which of the options founders tend to choose more or less.

This book is based on his research on tech and life-science startups, which means is very much focussed on busine
...more
Troy Swinehart
Jan 22, 2013 rated it really liked it
Book 19 of 24 for the year and it's only the end of June! Not getting cocky, but I might need to up the count for 2012. (Assuming the Mayans are wrong about that whole end of the world thing.)

So I am not going to count this one because I really don't see me finishing it - so it's not done done.

While I do think there is a significant amount of information that I have found very relevant to founding your own business I find this a difficult book to read and assimilate. The book (IMHO) is written
...more
Arvin
Jan 27, 2014 rated it liked it
I started reading this book to answer the question... "Why do people sell their companies to big corporations if it usually means the death of their product?" While this book does focus onthe wealth vs. control aspect of founding a company... it focuses more on the early stages and dealing with early investors rather than a corporate acquisition (was covered briefly in an appendix at the end of the book).

Still there were some useful information for would-be entrepreneurs.
1) For first time, foun
...more
Jake
May 31, 2013 rated it really liked it
The book covers a variety of key decisions that founders must make at different stages of the startup. Most are pretty obvious. But the book does a good job explaining how to make the choice that is right for you at the various points. You're encouraged to do a lot of introspection and determine exactly what it is that motivates you. Only then, once you truly understand yourself, can you make the best decisions.
The Founder's Dilemmas draws on a bunch of research and summarizes how things have wo
...more
Way
Feb 17, 2015 rated it it was amazing
This is a fantastic book on the various decisions, conflicts, and pitfalls that befall a burgeoning startup. The biggest takeaway is what's called the wealth-control dynamic, where a founder can often take a series of choices that either increase wealth or increase the amount of control of the startup.

Building wealth involves tapping weak ties, finding highly motivated and talented cofounders, hiring expensive but skilled workers, pursuing VC funding, and being willing to let a nonfounding CEO t
...more
Adam Wiggins
Dec 23, 2014 rated it liked it
Shelves: business
As a company founder, you'll face a lot of decisions and situations that have no parallel to the challenges you face in, for example, a salaried job in an existing company or going through school. I found this book very helpful in shedding light on patterns for those decisions and what their outcomes often are.

However, I also found it tedious in many places due to the author's systematic, academic approach. Many of the statistics they rattle off seem like meaningless numbers. Thankfully it's wov
...more
Victor Delgado
Jan 02, 2016 rated it really liked it
Shelves: paperplanes
Good collection of tips for founders backed by extensive research and in-depth case studies of some entrepreneurs such as Ev Williams.

The chapter about negotiating equity splits is especially full of valuable advice. Some quick quotes out of my notes:
- "Ideally, the equity split will approximate each founder’s long-term level of contribution (...)"
- "four sets of criteria emerge that can help sharpen the negotiation and increase the chances of crafting a sustainable agreement. Those criteria ar
...more
Branimir
Apr 09, 2012 rated it really liked it  ·  review of another edition
A good book, that pinpoints the possible hurdles ahead of a startup. It is true, as many have pointed out before me, that Wasserman is more of a researcher, so no solutions are given. Still, even seeing a list of structured examples is of great assistance to an entrepreneur. I personally found all of the struggles that I have met so far to be presented inside (and valid for new non-US businesses).

Future readers, have in mind that this book is intended for people that are about to get into a new
...more
Nic Brisbourne
Mar 16, 2013 rated it really liked it
Founders Dilemmas exposes the choice founders face between maximizing the value of their shares and retaining control of their company. Most entrepreneurs want to do both, but Wasserman empirical study shows that for all but a few lucky founders it is either or. He then goes on to explore the current choices founders can make and how they promote either value growth or control.

The most important of these are:
- whether to have co-founders
- whether to raise venture capital
- whether to make expensi
...more
Pete
Apr 04, 2015 rated it really liked it  ·  review of another edition
A thoughtful and academically precise review of the dilemmas facing founding and operating a startup

I have to say I always rather enjoyed Noem's book on entrepreneurial dilemmas. It is a dry and fact based read, yet very much a worth while endeavor. The book does a good job of mapping out the decisions and dilemmas implicit in the creation and operation of a startup company using the framework of control verses wealth generation to compare choices and potential outcomes.

I was reminded of late t
...more
Steve Pipenger
Jan 05, 2014 rated it it was ok
Good. Insightful. Makes one think. Assesses what makes entrepreneurs entrepreneurs. Talks about the advantages and disadvantages of starting one's own business at different experience stages and stages of life.

However, this strikes me as a prototypical book where someone in academia writes about "entrepreneurship." He leaves out a sizable segment of people who have started their own businesses because they had to, either through a layoff, having to go back to work...entrepreneurs by necessity (p
...more
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