Table of Contents
Survey Results
Noam T. Wasserman asks the questions that many entrepreneurs avoid when starting a business. The Founder’s Dilemmas is an academic style business book that starts off by providing you illuminating survey results that touch on several important topics about entrepreneurship. One survey investigates the differences in motivation between entrepreneurs and employees. Entrepreneurs are primarily motivated by the need for autonomy, to manage people, and financial security – while employees are motivated by prestige, stability, and financial security.
Individual Dilemmas
In addition, Wasserman walks you through the key questions every entrepreneur must ask before starting his business such as: whether you want to prioritize wealth creation over control, how to evaluate your business idea, whether to start a business with a team or go it alone, and if accumulating work experience is a good idea before making the leap. He answers these questions by drawing on relevant statistics and case studies of entrepreneurs he’s interviewed for the book. For example, on average – an entrepreneur has accumulated twenty-five years of work experience before starting a business.
The advantages of accumulating work experience before starting up include gaining industry specific knowledge, social capital, and financial capital. However, the disadvantages of being an employee include forming an unhealthy addiction (golden handcuffs) to financial stability. And founders who wait too long may lack the required energy and drive to drive a start-up forward. Finally, starting a business at a later age likely involves a significant personal risk – if you had a family to take care of.
Team Dilemmas
The rest of the book delves into the details of forming a team – and whether it’s a good idea to form a team in the first place. The topics range from discussing the benefits and perils of starting a business with friends and relatives to the best ways of dividing equity, and best practices for dealing with investors.
There is a trade-off between going solo vs forming a team. If you are motivated to start a business to maximize wealth, then forming a team is of paramount importance, but the trade-off is loss of control and more complex decision making. Having to manage people, and inevitable differences in opinion between founding members can slow you down, in addition to the uncontrollable situation of your team member not holding up their end of the deal. You are more likely to attract investments as a team, and will move a lot faster, but it’s important to deeply consider the costs of doing so.
Evaluation
I think many of the questions covered in the book deserved a deeper analysis. Wasserman covers some topics far more extensively than others, and depending on what you are looking for, you will either be very satisfied or very disappointed with the book. Regardless, Wasserman makes up for the lack of depth with the breadth of subjects covered.
- Durability (I Will Read This Again): 8/10
- Originality (This Taught Me Something New): 8/10
- Experience (This Was Enjoyable to Read): 7/10
- Efficiency (This Was Concise): 7/10
- Shareability (I Will Recommend This Book to My Friends): 9/10
UW Score: 80/100
Wasserman does a great job at tackling sensitive topics that are surprisingly – rarely discussed in popular books about entrepreneurship. Any potential founder will benefit enormously by figuring out which questions they should be asking of themselves, their team members, and why.
If you’re an entrepreneur and you want a quick guide to know what to think about before launching you business, check out The Myth of Entrepreneurship.