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

Noam Wasserman

Mar 2012 · The Kauffman Foundation Series on Innovation and Entrepreneurship Book 13 · Princeton University Press

About this ebook

A guide to the early decisions that can make or break startup ventures

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.

Ratings and reviews

The book is great - great data and great anecdotes. Fills a niche that has been painfully empty - advice for high tech entrepreneurs based on real data. Readable. Figures, diagrams, and charts are used liberally and to great affect. NOTE - do not plan to read this book on an iPhone. The presentation of figures fails (they show up as grey squares). Figures are fine on a desktop or laptop. Cannot speak for tablet. But figures are key for this book, so be warned.

5*

About the author

Noam Wasserman is an associate professor at Harvard Business School.