Based on a decade of deep research that includes data on 10,000 founders and more than two dozen “inside” case studies, THE FOUNDER’S DILEMMAS gives a groundbreaking analysis of the decisions faced by a startup’s founding team, early hires, and investors.
Entrepreneurs embarking on their startup journey have had no roadmap to follow—until now. What are the costly mistakes that founders should avoid and can such mistakes be undone? How can founders expect the best while preparing for the worst?
What are the trade-offs founders must negotiate between building wealth versus retaining control of a startup? To help entrepreneurs achieve founding success, THE FOUNDER’S DILEMMAS arms them with real knowledge of common and significant pitfalls.
Here are three key facts from the research:
1) People problems are the leading cause of failure in high-potential startups:
Around 65 percent of the failures of high-potential startups are due to “people problems”—the interpersonal tensions within the team.
These problems consistently fall into three categories:
Role and decision-making problems,
Reward problems (e.g., tensions over equity splits).
Within each category, the most common choices are oftenthe most hazardous.
2) Entrepreneurial strengths often become Achilles heels:
Early on, a founder’s passion for the idea, confidence in its prospects and in his or her own abilities, and attachment to the startup can be the founder’s greatest strengths. As the startup evolves, though, each of those strengths can become a major liability as the founder refuses to adjust the idea, underestimates the need for additional resources or skills, and makes decisions that harm the startup. Strengths overextended become weaknesses
3) Founders usually have to choose between becoming “Rich” versus remaining “King”:
Founders who bring in outside resources imperil their control of the startup; conversely, founders who resist imperiling their control often fail to attract the resources necessary to realize the full potential of the startup. Founders who kept control of both the CEO position and of the board of directors had equity stakes that were only 50 percent as valuable as the stakes held by founders who had brought in outside resources and given up control of both the CEO position and the board of directors.
The Abeo Hidden Motivators Profile can help founders determine their motivations and those they might choose to work with, especially if they want to be “rich” or “king”, reducing the risk of failure and frustration from differing values.