The Founder’s Dilemmas summary

So you think you’re an entrepreneur? Does this mean you should drop everything and start your own business?

Hold up for just a moment. Here’s one question to consider. Do you know how the product you want to make is manufactured? If you don’t, then maybe you need more human capital before you start.

Human capital is vital, but it won’t be enough unless you’ve got another kind of capital up your sleeve: social capital.

Your social capital is the social and professional network you bring to your company as a founder. It should allow you to access established resources, as well as discover new ones.

Do you have enough cash to start and run your company? Similar to social and human capital, you will need financial capital to succeed.

Barry Nalls founded Masergy on his own, as in addition to his experience and professional connections, he also had enough cash to start the business and cover living expenses until he made a profit.

There’s no question that the coveted title of chief executive officer is one every entrepreneur wants. Who gets to be a CEO when there’s more than one start-up founder, however, is less clear-cut.

The title of CEO usually goes to either the “most committed” co-founder or the person who came up with the idea for the company in the first place.

If you have two co-founders in your start-up, how should you distribute company equity? You may think that a 50/50 split is the best, if not fairest, option. But rarely is this so straightforward.

The experiences of entrepreneur Evan Williams offer an interesting lesson in equity distribution.

Who wouldn’t want to make it big with their best buddy? Working with people you know well can be easy from the outset, but potentially heartbreaking too.

Founders often find that by hiring friends or relatives, they can build a more dedicated, driven organization. For example, Pandora Radio’s founders chose to hire people they already knew with the idea that friends and family would be willing to make more sacrifices and be more productive.

Just as not everyone has what it takes to be an entrepreneur, not everyone is fit to be a start-up employee. Which sort of person then will make the cut?

Surprisingly, it’s the generalists, not the specialists, who are worth your while. Start-ups in the early stages require a fluid strategy to cope with the ups and downs of a new business, thus employee roles should be fluid enough to manage these rises and falls.

Spend or save? This seemingly simple decision becomes a crucial one as start-up founders begin to grow their ventures.

Should you look for outside support for your start-up, or tighten your belt and try and make as much as you can from what little money you have?