Noam Wasserman
The Founder’s Dilemmas
ISBN: 978-0-691-15830-3
In many previous posts on this blog and in this book review series, I’ve discussed the importance of failure in the entrepreneurial process. The best way that I’ve found to teach entrepreneurship is to experience the process, make mistakes, and ask lots of questions along the way. Textbooks and classes can give you the theory and examples, but building your own business is the more enduring way to learn the craft.
The Founder’s Dilemmas by Noam Wasserman is a comprehensive checklist of ways things can go awry in the process of building a business, from founding to exit. It highlights all of the different points of failure for new startups and inexperienced founders, and could be called an “encyclopedia of failure.” The text starts listing points of failure even before the company is founded – is it worth quitting your full-time job to pursue the business – all the way through investors and CEO succession. There are so many different potential points of failure along the startup journey, and Wasserman does an amazing job hitting nearly all of them.
Examples used throughout the text show that there is no one “correct” answer when building a business – every startup is different, and what worked for a founder previously may not work exactly the same again in another business. So many different variables are at play when building a company, from the mix of founders, to market conditions, to hiring decisions and the mix of investors involved. For each business you build, Wasserman discussed the balance between three different factors: relationships, roles, and rewards. Each situation is going to involve a different delicate rebalancing between these factors. I’ve seen this balance play out both incredibly well and incredibly poorly during Startup Weekends and while working with students as they dive head-first into entrepreneurship.
The chapters on hiring issues and CEO succession were, in my opinion, the most useful of the entire book. These failure points occur when the startup has the most to lose – bad hires and bad transitions of power can cripple even the most successful companies. Badly-fitting employees can grind departments to a halt, and is why the concept of firing fast exists. In the same way, many founders are not capable of leading a company when it is highly scaling, as building from zero to one and building from one to a million involve vastly different skill sets. Finding ways to cajole original founders who aren’t up to the test of scaling a company to move aside can be tough. As a founder, you have to be ready to have this discussion with your board when the time comes.
While the book is designed to help you identify potential points of failure, it doesn’t serve as an answer to all those problems. You will make mistakes as a founder, even with the best intentions. Having a text that can help you identify those problems might give you as a founder or executive more elbow room in dealing with those problems, taking things on directly as needed. The Founder’s Dilemmas is designed to serve as a reference, rather than a cover-to-cover read. It’s there when you need it, as issues arise.
Overall, 9/10, would highly recommend to founders looking to avoid some of the major pitfalls and problems that startups and scaling businesses can face. All startup founders will make mistakes and missteps along the path from idea to scale. However, when armed with the information presented in this book, founders have a better shot identifying issues before they spiral out of control and destroy the business from within. Failure will happen along the entrepreneurial journey, but knowledge can help turn those major failures into small bumps in the road.