There is a good reason why some people describe themselves as “serial entrepreneurs.” Few things present more of a challenge, offer more room for creativity, and ultimately provide more personal satisfaction than the act of starting your own company and developing it from a fledgling enterprise to an enduring success. When done correctly, entrepreneurship provides both excitement and glamour.
However, for every new business that eventually becomes a household name there are literally thousands that fail. Because startups are notoriously difficult to shepherd from concept to profitability, a cottage industry has sprung up to advise wannabe entrepreneurs. The founders of many of the most successful startups still make basic mistakes early on that later cost their companies millions in legal and accounting fees. Of course, that does not prevent some of those high profile “success” stories from hitting the lecture circuit to impart their wisdom to eager newbies, sweeping their mistakes under the rug and passing off good luck as wisdom.
Given all the misinformation surrounding best practices for startups, Noam Wasserman’s book The Founder’s Dilemmas: Anticipating and Avoiding Pitfalls That can Sink a Startup represents a uniquely valuable resource for any entrepreneur. Wasserman, a Harvard Business School professor famous on campus for his class about startups, combines the war stories popular on the lecture circuit with data-driven research. The narratives as well as the data point to something everyone involved in a startup instinctively knows but never seems to acknowledge. Namely, that the decisions made early on have outsized effects down the road.
Despite the tacit knowledge that the earliest decisions are often the most important ones, most entrepreneurs seem to rely less on their head and more on their gut. The results, according to Wasserman’s research, are often disastrous. However, The Founder’s Dilemmas is much more than a cautionary tale designed to make entrepreneurs think more about how they make decisions. It also lays out the types of decisions commonly associated with starting a company, including everything from how to split equity within the founding team to knowing when it is time to show a CEO the door.
Wasserman reminds readers that along with the excitement inherent in starting an enterprise comes a host of problems. Far from being a warning about the perils of entrepreneurship however, The Founder’s Dilemmas fully embraces the ethos. Sure, every startup has problems, but Wasserman also reminds us that for every problem there is a solution.