Most entrepreneurship classes chase the strategy-innovation-finance trifecta. But people problems cause more than 60 percent of new-venture failures, research shows. Founders' Dilemmas dissects the people decisions entrepreneurs face at critical junctures—particularly in the beginning.
The first people that students consider are themselves. Associate professor Noam Wasserman pulls the hungriest entrepreneurs up short by asking whether they should start their businesses smack out of school or first pack experience under their belts. What kinds of jobs—in big companies or small firms, operations or sales—will best prepare them? "We also legitimize discussion of personal issues," says Wasserman. "Maybe right now the market needs your idea, but the window of opportunity doesn't map to your personal or family situation. What do you do?"
Students next mull whether to launch alone or with partners. Wasserman's decade of research has yielded voluminous data on companies started by soloists, with friends, with family members, and with colleagues. Classes discuss the pros and cons of each variation. Students also role-play negotiations over equity splits, titles, and responsibilities. "Before the exercise, they rate how much they trust their teammates, and, after, they do it again," says Wasserman. "Has the negotiation forged a stronger team or blown up the team? These are charged issues."
Students learn to anticipate problems with investors and important hires and practice difficult conversations with both. Skipping ahead, Wasserman asks students to imagine how they will feel about ceding power to a professional CEO. "We look at the decision to stay king, even if that means you can't attract the investors and hires the company needs," he says.
"Early decisions have long-term implications for founders, their teams, and their ventures," says Wasserman. "They have unexpected consequences. If you get them wrong, they can come back to haunt you."
Syllabus for Founders' Dilemmas: