Founders Dilemmas (Research Paper Sample)

Founders Dilemmas
Institution
Introduction
Evan Williams is an American entrepreneur who has founded numerous internet companies. He has created world leading websites such as Blogger and Twitter, which he was previously the CEO and chairman. He faced key dilemmas in making important decisions relating to his ideas all through his entrepreneurial journey. He had to make necessary steps that would later shape the start-up’s future, impact its value and also aid in determining his control over the business. With Blogger, he chose to co-found with his girlfriend but retained the majority of the equity and the CEO title. Evan funded the company with his own money and from friends and family. Initially, he hired friends so as to reduce the development costs. Blogger ran low on cash when the dot-com era boomed. He refused to sell Blogger after acquisition offer. However, this decision led his cofounder and almost the entire staff retiring. He had to solicit for donations to keep Blogger active. Later he succumbed to the pressure and sold it to Google. He then headed to develop Odeo to capture the massive potential for podcasting.
Founder’s background
Twitter is a popular social networking website. Twitter was placed into a new company in 2007, with Evan as co-founder, investor and a board member. Evan became the CEO on October 2008 after replacing Jack Dorsey, who then became the chairman. By the end of 2009, twitter was ranked the third most favourite social network. By 2013, Twitter had over 200 million users. Following announcement of the IPO in 2013, Twitter was valued at between $ 14 billion and $ 20 billion. The success of Twitter has been greatly attributed to Evan Williams, who ensured its growth to a multibillion company (Kamberg, 2013).
Going with Evan strategy, this paper will explore the underlying consistency of the decision he made as founder and the CEO of the company. The powerful motivations he used and the other situational factors of work. Founding a start-up business can be hectic, chaotic and can be seen as a fragmented way of life. The dilemmas of Evan as a founder highlights the coherent, consistent, trade-offs and systematic patterns involved in the most essential founding decisions. The dilemmas involve the dreamer’s decision whether or not to found the company and also the founder’s decision to stay or exit the company he created. The founders make the initial decisions that shape the business and its development towards their set target.
Career dilemmas
Founders have the dilemma of venturing into entrepreneurship. This is because they are not sure of tomorrow or whether their ventures will be rewarding and productive. It is a journey that needs critical thinking and thorough research. The decisions of how to approach the various tasks involved in the initial stages of a business are very critical as they shape the future of the business. Sporadically, situations always arise where the best course of action is key. For one to launch a start-up one must be passionate about the idea (Wasserman, 2008). Moreover, the ‘dreamer’ must have accumulated the right experience needed to venture in the particular field. Extensive research should be carried out on the market and if the idea at hand is receptive by the market. The personal situation should be favourable for the founder to leap.
A lot of research has been made on the optimum age of starting a company. However, age is a less factor than other traits that are normally forgotten. This is evident with the number of successful young founders globally. Evan, while working with O’Reilly as a marketer become an independent contractor by writing computer codes. This led to many freelance opportunities with other companies including HP and Intel. MIT technology review named Evan William among the top 100 innovators globally under the age of 35. He was able to deal with challenges of a young founder. When he founded the Blogger, he was faced with numerous challenges mostly due to lack of funds. However, he was able to overcome this by gathering funds from friends, family and relatives. His first employees were his friends and volunteers who would offer their support inexpensively to develop the website. To cope with the challenges, Evan chose to co-found Blogger with his former girlfriend but would fight to retain himself as the CEO.
Evan had the dilemma of either to remain working as an independent contractor or venture into entrepreneurship. At an early age in his career as a software developer, he was intrigued with the dynamics of business and wanted to be an entrepreneur and form his own company. However, he had a well-paying job and career with very reputable firm. Change may sound very exciting but for this to happen, one must do extensive research on the benefits of that change (Ferrell & Fraedrich, 2005). Evan did that and sought to advance with his career, but this time employing his entrepreneurial skills and founding his own company.
Though he was already doing challenging projects as an employee, he had the opportunity to be the leader of the more challenging project than his previous one. As a freelance developer, he did not have enough time to concentrate on his own project due to his current responsibilities at that time. However, this did not derail his efforts as an entrepreneur; he waited for the right time, when he had enough skills to spearhead his own project.
All through his project, Evan had to passionately evaluate his ideas across various areas. With Twitter, he had to do customer development so as to test his hypotheses. This is because he founded Twitter having worked already with successful own companies previously. Working on a new industry can be very hard especially without prior experience.
Team dilemmas/ hiring dilemmas
Building the team responsible to take the idea and develop it to come up with a company is the second dilemma founders’ face. They have to make the decision of whether to start the company solo or with cofounders to assist. While founding an entity solo is great since one avoids the possibility of complications arising from relationships and also keeping control of the company, there are essential aspects that must be taken into consideration (Wasserman, 2008).
To ensure the start-up will be a success, one must ensure that the social, human and financial capital are covered. It is very rare for a single person to have all these aspects. Evan, very young entrepreneur did not in any margin have the capability to cover for all that. However, he realised this and developed strategies to ensure that all the aspects are covered for. Evan sought support from friends, relatives and volunteers who were visionary with his ideas. When he founded Blogger, he did not have enough capital to suffice the development of his new company. This is why he had to gather funds from close friends and relatives. He would not get assistance from big companies because they demanded a lot of stake from his company. Friends and volunteers would come in handy since start-ups offer low cash compensation and high equity.
Secondly, it is very beneficial to have a cofounder since founding a company is extremely difficult. This is very essential since the cofounder will also share the lows and highs of the start-up. There is reduced risk when two or more people are involved. This is because they will share the ideas together and come up with the best strategies of developing their ideas. Also, when a risk occurs it will be mutually shared. This is what led Evan to found the blogger with his former girlfriend. He also co-found Obvious Corp. with his comrade Biz Stone and other employees who were previously employed by Odeo. Twitter was among the projects done by Obvious Corp.
Thirdly, while starting up a company, there are numerous jobs to be done. With cofounders, one will be able to develop and grow quicker. Evan cofounded Obvious Corp. with his comrades because he was visionary and wanted grow faster by spreading the responsibilities and the work-load. Working as a team was what led to the massive growth of Obvious Corp. Twitter come into place due to the efforts of the cofounders and their relentless efforts in team work.
Investor dilemmas
Often a start-up will require capital for investment as it grows before it becomes stable and have positive cash flow. Initially the investment capital usually comes from any of the following sources; own, family and friends, Venture Capitalists and Angel Investors. However, each choice of investment comes with both dilemmas and positive effects.
Most start-ups invest with family and friends and hires people who have a close relationship with them, investment from a group of people is sometimes fraught with danger and mostly avoided (Wasserman, 2008). However, this type of funded is always limited. Evan while starting the Blogger used money from friends and family avoiding the Venture Capitalists. He also hired close allies and volunteers. However, taking investment money from friends one risks the social relationship. Evan had to weigh out his options and ensure there would be no potential catastrophic repercussions on his social well-being.
Later, Evan sold blogger and turned to developing Odeo, which had the potential for podcasting. On realizing the potential of podcasting, he took over as the CEO from his cofounder. At this moment, he was able to raise $5 million from the Venture Capitalists who would then step in and assist in decision making. With this capital, he was able to hire experienced and skilled leadership team that would develop Odeo quicker (Oprica, 2013).
From the two sources of investment sought by Evan, he may seem as inconsistent. One case accepting funds from VCs and the resists it on the other. However, this different ...