This course is for students who plan to become involved in new ventures. This involvement can occur as founders, investors, or advisors. The course is focused on the human side of building an effective company. The focus on ‘people’ in a variety of challenging circumstances makes most of the lessons broadly applicable to any resource constrained, fast growing organization.
Founders’ Dilemmas examines the critical people decisions that have important long‐term consequences for founders and their ventures. Potential consequences include losing control of the venture, dissolving the founding team due to tensions between founders, and imperiling the venture’s financial gains despite the hard work and innovative ideas that were invested. The course’s goal is to empower students to make decisions that will steer them away from unintended consequences and towards the goals they hoped to achieve when launching and growing their ventures. For students looking to work at a startup, or invest in one, the course will help them be much more informed about the ventures with which they might be involved.
It is also a course that will force you to examine your purpose and values. In each situation you will be faced with professional and personal tradeoffs. How much should I share (money, equity, risk, glory) with my partners? When should I persist, when should I walk away? What should I do when personal and professional goals diverge? How can I face failure? How can I remain untouched by entrepreneurial success?
FD is a hands-on course. You will be asked to design agreements, construct presentations, create forecasts, hire and fire people, establish structure and culture, and make difficult choices that test your commitment and values.
We will focus on ‘people issues’ (i.e., the key challenges faced when deciding when and how to involve other people in the venture) in different contexts (i.e., those issues faced by founders regardless of the industry, geographical location, or period of time in which they are founding their ventures). The cases emphasize high‐potential ventures, mostly in high‐tech industries, where the choices we examine have the most impact on the future success or failure of the venture. While the course is focused on ‘people issues,’ it considers them in the context of business models, financing structures, organizational constraints etc. Case discussions will cover these topics and students are expected to have a reasonable understanding of the first year TEM course.
The course is also designed to address more ‘universal’ issues and develop skills in dealing with difficult and ambiguous challenges where there is no easy-to-follow road map. Inevitably the situations we address will force you to look inward at deeper issues of purpose and values. The content and frameworks draw on Prof. Noam Wasserman’s substantial research on Founder choices, my research on Entrepreneurial Failure, and a wide body of work on effective leadership.
Course Content and Organization
The course is comprised of three major modules:
1. START – The early decisions – What are the key decisions we, sometimes inadvertently, make in founding a company? What choices do we have? How do these choices affect possible outcomes? We will cover seven cases in this module. These cases are chosen to address the primary people-related decisions entrepreneurs make in the early stages of a company. One-study shows that over 60 percent of entrepreneurial failures can be traced to the people choices made at the founding stage of a company. Should I be a solo founder, or should I try to attract co‐founders? If I attract co‐founders, who should they be (e.g., friends, family, former colleagues, or strangers?); how should we split the roles and decision-making; and, how should we split the equity? What agreements and legal protections do I need to put in place? How should these initial structures change as the company grows and achieves Product Market Fit? What factors should I consider in deciding whether or not to bring in a professional CEO? How should I decide if I should continue with the venture or shut it down?
- BUILD – Building the Organization: How can I build an effective organization that embodies my values, and remains flexible and efficient? We will have six cases and three hands-on workshops. The cases and workshops will cover the key choices you will need to make in assembling the resources to execute on your vision. How can you create a productive and supportive culture (remember: ‘culture eats strategy for breakfast’)? What are the difficult decisions you have to make as the organization grows? How do you hire new senior people to work above the early employees who have created the company? How do you fire ‘partners’ who are not delivering what you need at the next stage of growth? How to choose a VC who will support your vision and add value beyond capital? How can you bring in professional management in a fast growing company and still maintain some degree of control and influence? How can you revitalize a successful entrepreneurial company that that has lost its creative spark? How can you balance the need for effective execution at scale with the disruption created by new innovation?
- EXIT – Success and failure, learning how to deal with each: What are the common causes and patterns of failure? We will have six cases and a panel discussion in this module. How can you manage your venture to minimize the probability of failure? If you are going to fail, how can you emerge relatively unscathed? When should you quit, sell, or exit your venture? How should your motivations for becoming a founder affect the choices you make?
Most classes are structured around cases, but the course will also feature panel discussions, experiential exercises, workshops, video clips, and guest appearances from case protagonists and industry experts. The class will require active reflection and several written assignments (two Blog Posts, comments on blogs, written reflections on classes and workshops, development of founder agreements, hiring specifications, investor / trade show presentations). 14 of the 21 cases are new. 13 were written in the last three months. So, you will be an active participant in working through problems that are faced by entrepreneurs now.