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The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup

4.08  ·  Rating details ·  4,038 ratings  ·  165 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 ventu ...more
Hardcover, 496 pages
Published March 25th 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
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
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
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
Kenneth Kinyanjui
Aug 05, 2018 rated it it was amazing
Shelves: entrepreneurship
This is one great book that I would recommend to anyone who is thinking of starting a venture or getting into a partnership to launch something.

A big percentage why most companies or ventures fail is due to people issues according to Noam Wasserman, this book prepares you with the tools needed to overcome people issues that may arise.

I enjoyed the many case studies presented in the book. I would also recommend if you are a founder already to get the audiobook from audible and listen to it on yo
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
Lukasz Nalepa
Jul 22, 2020 rated it it was amazing
Shelves: read-work
It seems that this bookis a must read for anyone who has a romantic on creating and running a startup. For me it was eye-openinig in many cases, and at least I have a better view where dillemmas exists and what severity certain decisions have. The book is backed up by extensive research along with vivid and well-known examples of first-time and serial enterprenuers, so it’s a great use case study, to undrstand how things are intervowen together, when one siezes the opportunity :)
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
Vikash Anand
Aug 14, 2019 rated it it was amazing
The Founder’s Dilemmas by Noam Wasserman is an insightful book for anyone working as founder, co-founder, angel investor, working in a Venture Capitalist (VC) firm or contemplating to start a company/business. The book gives wide perspective related to various dilemmas faced while taking decisions as founder or co-founder of a company, and the implications for choosing one over other.

The author has analyzed thousands of startups in the field of technology and life science in USA to find out issu
Popoy Mindalano
Mar 06, 2018 rated it really liked it  ·  review of another edition
Everyone who intends to start a business undergoes a lot of confusions that sometimes hinders the progress of the intended start-up. These are called the Founder’s Dillemas and if you have already experienced it then this is the best book for you in order to deal with the inhibition proceeding and developing further.

This book provides us with a guide on how to best found a start-up. If you are confused whether to start solo or as a team, just for instance, then it will show us the necessary requ
Hee Jung Ryu
Aug 08, 2018 rated it it was amazing
Good for people who, yet, don't know when and with whom to start a startup. ...more
Yevgeniy Brikman
Mar 20, 2021 rated it really liked it
A nice overview of some of the key decisions that every entrepreneur has to make: decisions that are more important than most founders expect, decisions where the options available are not always obvious, and decisions where the implications can be surprising or even counter intuitive. Getting these decisions wrong can be catastrophic: "if entrepreneurship is a battle, most casualties stem from friendly fire or self-inflicted wounds." These decisions include whether to be a solo founder or look ...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.
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
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
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.
Dec 03, 2018 rated it really liked it
Shelves: entrepreneurship
Noam Wasserman evaluates all of the critical decisions (dilemmas) that founders of start-ups face. Some are more obvious than others, but they all have significant consequences that warrant thoughtful consideration.

According to the author, all of these dilemmas boil down to a central dilemma: wealth vs. power. Founders can choose to prioritize the value created and pursue a rich outcome, or they can prioritize control over the company to pursue what Wasserman calls a "king" outcome. (Spoiler: t
Calvin Yuan
May 11, 2018 rated it it was amazing
If you are really thinking of starting a business, this book is a gold mine.

As many other reviewers have said, Wasserman mostly talks about the dilemmas that many founders face and the respective outcomes of each choice under those circumstances. He does not offer any conclusive solutions to many of the issues being raised. This is mainly due to there isn't such a panacea to all of these difficulties. Nevertheless, Wasserman's research is sound and comprehensive. He let me understand the import
Lee Pei Yit
Sep 12, 2017 rated it really liked it
If you are looking for a comprehensive guide to being a founder, this book is NOT it. The author removes the day-to-day decision making and industry-specific decisions in favor of more general, long term but high impact decisions that tend to be neglected. This makes the book sound bland, since the drama and epicness of being a founder are surgically removed, but I would recommend any serious founder-to-be to take a good look at this book prior to starting anything.

On the negative side, the book
Rasmus Leichter
Apr 06, 2021 rated it really liked it
Shelves: business
Some great insights, but could've been much shorter
- The 2 main and conflicting motivations of founders are wealth and control. Wealth-oriented founders are more likely to reach a "rich outcome" whilst control-oriented founders are more likely to reach a "king outcome". It is very rare to simultaneously reach both (e.g. Bill Gates). Founders should choose either a wealth or control strategy, and base every decision on the desired outcome. Mixed strategies usually fail. Example: you can raise lot
Adrian Green
Jul 09, 2020 rated it really liked it
This is the one of the most relevant books to early stage entrepreneurship I have encountered. However I felt that the book reused case studies to its detriment.

Key points:
- wealth based vs control based founders
Wealth based founders prioritize financial gains which are inline with investor incentives and may lead to better outcomes and relationships with investors. An example is Evan Williams at Odeo initially.
Control based founders prioritize maintaining control which may increase probability
Oct 27, 2020 rated it it was amazing
Never launch a startup alone, an entrepreneurs journey is too lonely!
You should go alone, the risks of founding with someone is too high.

Raise money because a small portion of a large pie is better than large portion of a small pie.
Don't give away the control of your company now matter what. Have faith in your vision.

If like me you find the advice from veteran entrepreneurs contradictory and wished there was smart entrepreneurship coach who could help you with scientific advice, you have to read
Feb 09, 2021 rated it really liked it
It's very dry. It's like eating those dried leaves you can find under the early snow in the month of November. It's terribly boring. My friend, whom I went to the college with, used to learn for an exam we had and fall asleep after reading every 2 pages. Wake up, read more and fall asleep again. because the material was so dry and boring. This is how dry and boring this book is. There's no humour, no fun, just plain old facts. I can safely say that had I not listened to this and actually read it ...more
Sep 08, 2017 rated it liked it
Shelves: business
A book which answers very well some questions entrepreneurs may have at the beginning of their journey. It is great to read it then to better understand the consequences of some early decisions on the later stages of a business.

I liked the examples backing up suggested resolutions - even though I felt they were very repetitive throughout. For a book talking about beginners' pitfalls however, I felt it ignored one of the most basic advice anyone can receive, which is the waste of time.

I found th
Ahmed Shahrour
Nov 04, 2017 rated it it was amazing
Absolutely deserved the 5 star rating. This book delves into three chapters where it begins with Founding Team Dilemmas (should you found alone, equity splits, etc.) and ends with Hires and Investors (Which hires to get onboard and which investor would best suit your goals). This is a perfect solution to the trial and error you'd have to go through to figure this information out.

In addition, the author references so many research articles it's unreal, and he always looks at both sides of an arg
Jul 17, 2019 rated it really liked it
Wasserman does a masterful job of explaining relational conflict in an understandable way. His concepts are simple enough to grasp and deep enough to encompass a wide variety of dynamic and stressful dilemmas. For those new to investor capital, he explains the structure well enough for context without unnecessary complication. This book is filled with relevant stories of wealth- and control-motivated founders and their decisions. In addition to the qualitative research, he has hard data analysis ...more
Apr 08, 2020 rated it it was amazing
The Founder's Dilemmas sheds light on so many fascinating facets of the founder's journey. I read about startups in the news, but I hardly had any idea about the choices and conflicts faced by people who start (high growth) companies. Wasserman presents many of the challenges and choices face by founders. Do they have the right motivations and life style to found? Should they find cofounders? When should they hire employees? Who should they hire? How do they establish the right culture? How do t ...more
Fernando Rodriguez-Villa
Published in 2012 and it shows. One of the core message of the book is that founders make a series of choices that guide towards either a "king" (high-control) outcome or a "rich" (large-scale or big payout) outcome. It also paints that successful founders are inevitably replaced by professional CEOs. The last 8 years have demonstrated not just that the very best / biggest entrepreneurial results have kept founder-CEOs in supreme positions of control, but that the investment community has recogn ...more
Ademola John
Aug 21, 2020 rated it really liked it
Amazing book. The writer identifies some of the common potential pitfalls that startup founders face when deciding to launch their startups. He talks about the conundrum that comes with analyzing the perfect time to launch a startup (with insightful case studies), choosing co-founders, dealing with investors and equity allocation within the founding team/early-stage hires.
He also highlights the pros and cons of founder's choices in choosing to launch solo or with co- founders. The part I found
Oct 28, 2020 rated it really liked it
Elementary reading for anyone thinking of starting a business or just useful insight into the minds of entrepreneurs. If you've been on the startup journey already, you'll find yourself nodding along throughout. Yep, maybe don't start your business with family members or your spouse. Yep, it's a good idea to negotiate equity split. Yeah, maybe you're not the best person to be CEO.

Lots of good research-anchored insights that ideally would make you stop and evaluate, stop all together, or at leas
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“A friendship built on business can be glorious, while a business built on friendship can be murder.” 2 likes
“IT’S UNFORTUNATE BUT TRUE: IF ENTREPRENEURSHIP IS A BATTLE, most casualties stem from friendly fire or self-inflicted wounds.” 2 likes
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