I read ‘Where Entrepreneurs Go Wrong — 9 Dilemmas Every Startup Must Face’ by Noam Wasserman, so I’ll share the insights I gained from the book.

Background: Want to Understand Points Where Entrepreneurs Make Wrong Choices in Advance

I wanted to understand in advance the points where entrepreneurs make wrong choices, so I decided to read this book.

Below are quotes and notes from the parts that impressed me.

Core Concepts and Arguments

I decided on co-founding with thinking close to the founder dilemma occurrence sequence.

When to Start a Company

Slowing growth at current employer: When the growth rate of the current employer begins to decline, employees often quit to start companies. The appeal of staying at the company decreases, and the opportunity cost of choosing to start a business also decreases.

「勤め先の成長の鈍化勤め先の成長率が下がりはじめると、その従業員が会社を辞めて起業することが多くなる。会社に留まる魅力が減り、起業することを選ぶ機会コストも減るからだ（43）。」

This was my pattern.

Roles

As startups mature, teams begin actively hiring people below the executive level. One measure that can be used to examine this evolution is structural leverage—the number of non-executive employees per executive. As shown in Figure 8-3, startups begin with quite small structural leverage of about 2.5 employees per executive and steadily increase this value as they mature. By the time startups complete their fifth round of funding, the average becomes 9.0 people, creating much more difficult management problems than when leverage was small initially. When there are many tasks that can be delegated and executives can efficiently manage subordinate employees, increasing structural leverage values will improve company performance. This is because subordinate employees learn best practices from executives and come to support them.

「スタートアップが成熟すると、チームは幹部レベルより下の人材を積極的に雇用し始める。この進化について検討するためのひとつの尺度として利用できるのが構造的レバレッジ──幹部ひとり当たりの幹部以外の従業員の人数である（10）。図８‐３に示すように、スタートアップは幹部ひとり当たりの従業員が約２・５人というかなり小さな構造的レバレッジから始まり、成熟とともに着実に値を増やしていく。スタートアップが第５ラウンドの資金調達を完了するまでには平均９・０人になり、初期にレバレッジが小さかったときよりもずっと難しい管理上の問題が発生する。委任できる仕事が多く、幹部が部下である従業員を効率的に管理できる場合には、構造的レバレッジの値が増えることで会社の業績は上がるだろう。部下である従業員が幹部からベストプラクティスを学び、幹部を支えるようになっていくからだ（11）。」

I want to adjust the number of management target members by referring to structural leverage.

What becomes clear from these situations is the danger of founding teams giving out CxO titles early on. While title inflation might be good for attracting co-founders and early employees to startups, it can become an obstacle when the need arises to upgrade the team.

Title inflation is an anti-pattern.

"Ideally, I should have always anticipated such situations and explained to the people I hired as my direct reports: 'At some point in the future, I will hire a boss for you. You might win that position, but please know there's a possibility we'll bring in talent from outside the company.' It's not difficult to say that—after all, ambitious people will want to believe they can handle high-level work. Indeed, that ambition was why I hired them in the first place, but usually they can't keep up with startup growth." Making communication clear and always moving with anticipation is difficult, but it's necessary in startups. However, even if you can do that, management challenges usually still remain.

「『できれば常にこうした事態を予想して、私の直属として雇う人材には説明しておく必要があったのです。『この先ある時点で、あなたに上司を雇うことになるでしょう。あなたがその立場を勝ち取ることもあるかもしれませんが、会社の外部から人材を入れる可能性を知っておいてください』。そう言っておくのは難しいことではありません──いずれにせよ意欲的な人であれば自分が高いレベルの仕事をこなせるはずだと信じようとするでしょう。実際、その意欲があったからこそ最初の段階で彼らを雇ったのですが、たいていはスタートアップの成長に対応しきれなくなります」コミュニケーションを明快にし、いつも予想しながら動いていくのは難しいことではあるが、スタートアップではそれが必要とされる。とはいえ、それができていたとしてもなお、管理面の課題はまだまだ残るのが普通である。」

I want to make communication clear and always move with anticipation.

During this fluid stage—especially when roles are still changing—hiring specialists who excel at specific tasks but cannot or will not contribute to other tasks is a big mistake. If you hire the world's best cellist when you don't know whether you're an orchestra or a marching band, you might suffer for it later. If it turns out you're actually a marching band, both the cellist and the band will have a tough time.

「この流動的な段階で──特にまだ職務が変化しているときには──特定業務に秀でてはいるがほかの業務に貢献できない、もしくは、する意志がないスペシャリストを雇うことは大きな間違いである。自分たちがオーケストラなのかマーチングバンドなのかわからないときに世界最高のチェロ奏者を雇えば、後々そのために悩むことになるかもしれない。結局マーチングバンドだったとわかったら、チェロ奏者とそのバンドはそこで厳しい時間を過ごすことになってしまう。」

For engineer hiring, I should hire so-called full-stack engineers rather than specialists.

However, as major uncertainties are resolved and the technologies and strategies used by startups become established, the value of flexibility diminishes. The option value of being able to move employees across different areas becomes meaningless, and the significance of having specialists who excel at specific tasks increases. The cost of hiring generalists instead of specialists—the relatively low quality of work by generalists—becomes more noticeable over time.

「だが、主な不確定要素が解消し、スタートアップが用いる技術や戦略が定まってくると、柔軟性の価値は薄れていく。分野をまたいで従業員を異動できるというオプション価値は意義がなくなっていき、特定業務に秀でたスペシャリストを擁する意義が増していく。それまではっきりしなかった、スペシャリストの代わりにジェネラリストを雇う代償──ジェネラリストによる仕事の相対的な質の低さ──が時間とともに目立ってくるのだ。」

I also need to understand the cost of hiring generalists instead of specialists—the relatively low quality of work by generalists.

That’s all from the Gemba on wanting to face dilemmas as an entrepreneur and avoid making wrong choices.