I’ve been recommending The Founder’s Dilemma by Noam Wasserman a lot these days. I like how Wasserman takes a his empirical study of 10,000-ish startups and looks for patterns.
The conclusion: People problems are the leading cause of failure in startups.
The patterns he focusses on are:
- Career Dilemmas – Should I found? When? Why? With Whom?
- Wealth vs Control Dilemmas – The finding that drives this is On average, the founders who keep the most control over their company make the least amount of money.
- Founding Team Dilemmas – Solo vs Team? Friends? Roles? Rewards ( Equity Splits and Compensation), Hiring, Investors, CEO-Succession
Many of us have a few unique experiences in each of these areas, but none of us have this huge array of experiences. It is good to see that we’re not alone in our experiences and that there are other choices to make.
The Wealth vs Control Dilemma is a curious one to me. It really grabbed me when I read Eric Ries’ review of this book last year. It made me think of PMC-Sierra founder Greg Aasen right away. I always thought his “give up control” strategy was unique and only worked for him. But turns out, “it’s a thing”. A good “thing”.
The only “quibble” that I’ve found so far with this book is that “It’s not a practitioner book”. It’s a data driven study of startups. That’s not bad, just is what it is. How one chooses to “interpret” the data always creates some “tension”. It’s also “too logical”, if that makes any sense.
- There is a good review by Eric Ries focussing on Equity Splits
- Chapter 1 is available at the author’s website, Read Chapter 1 « Noam Wasserman
- There is also more great material on Noam Wasserman’s Blog