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

by Noam Wasserman

“the Three Rs”—relationships, roles, and rewards.

there may be little need for the startup to grow quickly. The startup may not be expected to grow big enough to support multiple founders.

the wisdom of this go-solo-and-hire-as-necessary strategy depends on the circumstances. When the startup’s industry is growing quickly or if there are other challenges that place a premium on speed, even a founder who is self-sufficient at present may need a cofounder from the start because (a) the need for that co-founder will come soon and it may be hard to find the right person quickly enough and (b) a well-chosen cofounder can help build the startup more quickly than the core founder could do solo.

many of the habits people develop in large companies can be counterproductive in a startup.

Hiring experience at the wrong stage of the company

Building something from nothing requires a different skill set.”

I realized that in an early-stage company, there’s no such thing as a manager.

when they have to go back five or six years to find a project they were proud of contributing to, that’s a red flag.”

“Our mistake: hiring a big-company guy for a startup.

It is crucial for founder-CEOs not only to diagnose and correct the problems that arise from hiring the wrong person, but also to anticipate when a decision that was good at the time may need to be rethought because the startup has arrived at a new stage of development.

As we have seen throughout this chapter, the data indicate that each stage of a startup’s evolution is marked by important changes in its hiring needs.

it was critical for founding teams to create appropriate linkages among their own relationships, roles, and rewards, it is critical for the founders to create such linkages

with their hires.

a bonus-heavy compensation structure tied to individual performance may be productive with a salesperson but counterproductive with a programmer who is part of a development team; that is, rewards properly linked (or aligned) with one type of ...

many founders become hesitant to hire—or make sure to “hire slow”—for fear of making a mistake. But linking rewards and roles can help solve this problem;