COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL Introduction Overview of issues covered throughout the course. [01] 10:05AM Mon, Jan 25, Hawes Hall 202 (Classroom) [02] 11:40AM Mon, Jan 25, Hawes Hall 202 (Classroom) [03] 1:30PM Mon, Jan 25, Hawes Hall 202 (Classroom) TOPIC Course Overview: "Apple's Core" Steve Jobs and Steve Wozniak are best friends who enjoy pulling pranks together and talking about electronics. After several small collaborations, Jobs pitches Wozniak on starting a company together to sell computers based on Wozniak's design for a personal computer. Wozniak faces decisions about whether to quit the job he loves at HewlettPackard to join Apple Computer, how to define his role within Apple, whether to take on Jobs as his co-founder, whether to accept a third co-founder proposed by Jobs, and how to split equity with his co-founders. Early on, they add an outside investor who changes the company's trajectory and who brings in a new chief executive. Later, tensions rise between the two founders as their strategic visions diverge and as the company grows. Wozniak has now learned some disturbing news about his co-founder and has to decide whether that news will affect his continuing collaboration with Jobs. MATERIALS Apple's Core (809063) EC Weeks 1 & 2 Packet ASSIGNMENT 1. Is this a good founding team? Why? 2. What should Wozniak do now? var sc_project=4310452; var sc_invisible=1; var sc_partition=54; var sc_click_stat=1; var sc_security="79b650a0"; End of Introduction January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 1 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL When to Found At what point in my career should I start a company? What are the pros and cons of different career paths vis-à-vis my ability to successfully start and run a new venture? [01] 10:05AM Wed, Jan 27, Hawes Hall 202 (Classroom) [02] 11:40AM Wed, Jan 27, Hawes Hall 202 (Classroom) [03] 1:30PM Wed, Jan 27, Hawes Hall 202 (Classroom) TOPIC Early Career Decisions: "Humphrey and Cecilia" Humphrey Chen is in his final semester at HBS and is trying to choose between two career options: An offer from a toptier consulting firm, and the chance to launch a new venture with a classmate. What should Humphrey do? MATERIALS Orientation for Viewing Humphrey Chen (498036) EC Weeks 1 & 2 Packet Video: Humphrey Chen discusses his two options (start-up vs. consulting). Please view this video before class. Poll: "FD | Your Own Career Decisions" Please complete this poll by 3:00 pm on 2/1. Poll: "FD | Humphrey and Cecilia" Please complete this poll by 7:00 am, class day. "Lies Entrepreneurs Tell Themselves" (by Steve Blank) (Optional) STUDENTS SHOULD BE ABLE TO ACCESS IT AFTER "HUMPHREY" CLASS Josh Lerner?s paper with data on the percentage of HBS students who found ventures when they graduate ASSIGNMENT PART 1: POLL ABOUT YOUR OWN CAREER DECISIONS Please complete the short "Your Own Career Decisions" poll above. PART 2: POLL ABOUT HUMPHREY'S DECISION Please complete three tasks: 1. Read the "Orientation" document. January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 2 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL 2. View the short video in which Humphrey describes his two career options, doing a start-up vs. becoming a consultant. 3. Complete the poll about Humphrey's decision. In class, we will watch further video clips and discuss the decision facing Humphrey. [01] 10:05AM Mon, Feb 1, Hawes Hall 202 (Classroom) [02] 11:40AM Mon, Feb 1, Hawes Hall 202 (Classroom) [03] 1:30PM Mon, Feb 1, Hawes Hall 202 (Classroom) TOPIC Late Career Decisions: "Big to Small: The Two Lives of Barry Nalls" Barry Nalls describes lessons learned during his 25-year career--his rise at GTE and shorter-lived ventures--and how these prepared him to found MASERGY, a telecommunications start-up. Even as a young boy in a family of entrepreneurs, Nalls had a reputation as a hard worker, but instead of becoming an entrepreneur himself, he built a long career at "the biggest company around," GTE. After years of working there in sales and marketing, he decided to venture out on his own. His GTE experiences armed him for some entrepreneurial challenges, but also caused additional problems as he tried to start, build, and grow MASERGY. Four years after founding the venture, he now feels that he should have "taken the entrepreneurial plunge" much earlier in life. MATERIALS Big to Small: The Two Lives of Barry Nalls (808167) EC Weeks 1 & 2 Packet Jeff Bezos on his decision to quit a Wall Street job to found Amazon (2:39 video) (Optional) ASSIGNMENT 1. Did Barry Nalls' experiences at GTE prepare him to become a founder? How? 2. Comparing the draft of his initial VC pitch and his final version of the pitch, what did Barry learn about pitching to VCs? 3. Was Barry more or less prepared to become a founder than Humphrey Chen was in our last class? January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 3 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Tue, Feb 2, Hawes Hall 202 (Classroom) [02] 11:40AM Tue, Feb 2, Hawes Hall 202 (Classroom) [03] 1:30PM Tue, Feb 2, Hawes Hall 202 (Classroom) TOPIC Changing Industries: "Curt Schilling's Next Pitch" As his major-league pitching career was starting to wind down in 2006, baseball all-star Curt Schilling decided to become an entrepreneur. Looking to focus his tenacity and his passion for online role-playing games on a new challenge, he founded an online gaming venture, which later became known as 38 Studios. During the ventures first two years, he built a team of 70 people, including an executive team of business and industry veterans, and learned key lessons about the challenges faced by industry-changing entrepreneurs. Wanting to self-fund the venture initially, and later finding it hard to raise outside money, he put a substantial percentage of his net worth on the line to build 38 Studios. Now he is facing a critical acquisition decision that could either double his problems or help solve them. MATERIALS Curt Schilling's Next Pitch (000-000) Not yet published EC Weeks 1 & 2 Packet Poll: "FD | Curt Schilling's Next Pitch" Please complete this poll by 7:00 am, class day. Poll: "FD | Course Paper" This poll opens at 3:00 pm February 2 and closes at 7:00 am on March 19. (It will also be available on the resources tab.) ASSIGNMENT Please complete the poll above (1 click + 1 line!), and think about the following questions: 1. Does Curt Schilling have what it takes to eventually become an All-Star entrepreneur? 2. If you're Jen Maclean and you've just decided to take the job at 38 Studios, what is your biggest worry? To address that worry, what ground rules would you negotiate with Curt? Note: Later in the semester when we convene our Entrepreneurial Careers Panel, we will revisit the issues raised in the "When to Found" module. End of When to Found January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 4 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL Building the Team Should I be a solo founder, or should I try to attract co-founders? If I attract co-founders, who should they be; how should I split the roles with them; and, how should we split the equity within the team? Once I start hiring non-founders, should I hire best athletes or specialists? [01] 10:05AM Wed, Feb 3, Hawes Hall 202 (Classroom) [02] 11:40AM Wed, Feb 3, Hawes Hall 202 (Classroom) [03] 1:30PM Wed, Feb 3, Hawes Hall 202 (Classroom) TOPIC Choice of Co-founders, Equity Splits: "Smartix: Swinging for the Fences" Vivek Khuller has built Smartix by attracting classmates to co-found it with him, learning how to pitch it to top VC firms and potential strategic partners, and honing the concept and business model by testing it in smaller venues. Now, he is facing the implications of the choices he has made in each of these areas and has to decide how to manage those implications. MATERIALS Smartix: Swinging for the Fences (808116) EC Weeks 1 & 2 Packet Poll: "FD | Smartix: Swinging for the Fences" Please complete this poll by 7:00 am, class day. ASSIGNMENT Please complete the poll above, and think about the following questions: 1. Is this a good founding team? Why? 2. What are the pros and cons of Vivek's approach to splitting equity within the founding team? 3. Do you agree with Vivek's decision to target only the top-five VC firms and only the best venue? Why? 4. Should Vivek accept the current offer from MSG? Why? January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 5 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Mon, Feb 8, Hawes Hall 202 (Classroom) [02] 11:40AM Mon, Feb 8, Hawes Hall 202 (Classroom) [03] 1:30PM Mon, Feb 8, Hawes Hall 202 (Classroom) TOPIC Division of Roles, Founder Persistence: "Savage Beast" For several months, things have been spiraling downwards at Savage Beast, the music-recommendation company started three years before by Tim Westergren. The companys founder-CEO recently left due to pressures both at home and within the venture, dozens of investors have turned thumbs-down on the venture, salaries have been cut, and tensions have risen within the founding team. Now Westergren, the founder who has taken over as CEO, is facing even deeper pressures as he finds out about a lawsuit filed by former employees, and he is wondering if it is time to give up on ever achieving his vision. MATERIALS Savage Beast (A1) (801-051) Please complete the Savage Beast "Page 8" poll where indicated in the case. Then complete the "End of Case" poll, after you have finished reading the case. Thank you. EC Weeks 3 on Packet Savage Beast (B) (809096) Classroom Poll: "FD | Savage Beast - Page 8" Please complete this poll at the end of page 8. Both Savage Beast polls will close at 7:00 am, class day. Poll: "FD | Savage Beast - End of Case" Please complete this poll at the end of the case. Both Savage Beast polls will close at 7:00 am, class day. Short excerpt: Steve Jobs on recovering from disaster ASSIGNMENT Please complete the poll above, and think about the following questions: 1. Is this a good founding team? How does it compare with the Smartix team we studied last class? 2. Was Jon right to quit? Should Tim quit now? January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 6 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Tue, Feb 9, Hawes Hall 202 (Classroom) [02] 11:40AM Tue, Feb 9, Hawes Hall 202 (Classroom) [03] 1:30PM Tue, Feb 9, Hawes Hall 202 (Classroom) TOPIC Founding Team Challenges: "Playing With Fire at Sittercity (A)" In August 2006, Genevieve Thiers, founder and CEO of Sittercity.com, looked over at Dan Ratner, Sittercitys vice president and her boyfriend of five years. It had taken her six long years to build Sittercity into the nations leading babysitting web service. Thiers had begun Sittercity in 2001 in Boston as a way to connect babysitters and parents online, at a time when no one else had thought to manage care-giving connections via the Web. She had started the company right out of college while working full-time, but by 2006, Sittercity had sitters available across the country, was larger than all of its competitors combined, and Thiers still owned two-thirds of the venture. The company now had plans to add pet, elder-care, house and tutoring services in 2007, and Thiers wondered what other challenges she and Ratner would face as she continued to grow her venture. MATERIALS Playing With Fire at Sittercity (A) (809009) Classroom ASSIGNMENT 1. What were the riskiest decisions Genevieve made while building Sittercity? 2. What issues should Genevieve be most worried about now? January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 7 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Wed, Feb 10, Hawes Hall 202 (Classroom) [02] 11:40AM Wed, Feb 10, Hawes Hall 202 (Classroom) [03] 1:30PM Wed, Feb 10, Hawes Hall 202 (Classroom) TOPIC Evolution Across Ventures, Hiring Tradeoffs: "Frank Addante, Serial Entrepreneur" Frank Addante is a 28-year-old serial entrepreneur who is in the process of building his fifth venture. Of his first four ventures, two were sold, one went public, and in the last he decided to close the venture and return unused capital to his investors. With the passing of each venture, he has learned about forming founding teams, splitting equity with his co-founders, hiring executives to work for him, and when to take outside funding. Now, he's facing pressure from investors who aren't happy with how he is building his current team and are questioning whether he should remain CEO. MATERIALS Frank Addante, Serial Entrepreneur (809046) EC Weeks 3 on Packet ASSIGNMENT 1. Comparing Zondigo to StrongMail, what were the differences in how Frank hired employees for each of those ventures? 2. With StrongMail, what lessons should we learn from Frank?s experiences hiring all of his Vice Presidents of Sales? 3. Has Frank changed across the five ventures? How? 4. What should Frank do now? IMPORTANT NOTE: The "individual role" cases for the UpDown negotiation exercise will be distributed in class today. (The "core" UpDown case that everyone should prepare is already in your case packet.) Each of you will be assigned one of three roles: Michael, Georg, or Phuc. If you miss class, you may pick up your individual-role case from Theresa Gaignard at Rock 316B, tgaignard@hbs.edu. January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 8 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Tue, Feb 16, Hawes Hall 202 (Classroom) [02] 11:40AM Tue, Feb 16, Hawes Hall 202 (Classroom) [03] 1:30PM Tue, Feb 16, Hawes Hall 202 (Classroom) TOPIC First-hand Experience With Equity Splits: "UpDown Negotiation Exercise" Michael Reich is having severe doubts about how he split the equity with his co-founders two months ago, when they completed a one-page "November Agreement." Since then, Michael has found an angel investor and has worked nonstop on the business, while one co-founder was off enjoying the winter break with his family and the other worked on lucrative consulting contracts for other companies. Michael has just sent his co-founders a proposal that would reallocate the equity within their founding team, and all three founders are getting ready to reopen a negotiation they thought had been finalized. This is a REQUIRED exercise--ALL students must participate. MATERIALS Negotiating Equity Splits at UpDown (809020) EC Weeks 3 on Packet UpDown: Confidential Instructions for MICHAEL (809021) Classroom UpDown: Confidential Instructions for GEORG (809022) Classroom UpDown: Confidential Instructions for PHUC (809023) Classroom Poll #1: FD || UpDown - Pre-negotiation Poll This poll must be completed by EVERYONE. Poll #2a: FD || UpDown - Post-Negotiation Poll This poll must be completed by EVERYONE. Poll #2b: FD || UpDown - Agreement Terms (Michael Only) All Michaels must complete BOTH the Post-Negotiation poll AND this Agreement Terms poll. ASSIGNMENT INDIVIDUAL PREPARATION 1. Read the Negotiating Equity Splits at UpDown "core" case. January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 9 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL 2. Read YOUR confidential role information and prepare for the negotiation. If you have not yet received your individual case, email Theresa Gaignard. 3. Fill out your "Pre-Negotiation Poll" before your group gets together to conduct the actual negotiation. 4. Please do NOT discuss this case or the exercise with other students before you do the actual negotiation. GROUP NEGOTIATION 1. Negotiate with your group, wherever you want. 2. Please complete the "Post-Negotiation Poll" by 4:00pm the day before class. NOTE: In addition, each team's "Michael" must complete a second, "Agreement Terms" Poll. NOTICE: The negotiation results may also be used for a research project, in which case all names will be deleted before the results are analyzed. Nonetheless, the inclusion of your results in the research is voluntary. If you choose not to be included in this research, please contact Toni Wegner, HBS Coordinator, Protection of Research Participants, to opt out. (I will not know that you opted out until after the semester.) You may also contact Toni about questions or concerns related to your rights in this research. Contact info: twegner@hbs.edu or 617-496-9952. January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 10 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Wed, Feb 17, Hawes Hall 202 (Classroom) [02] 11:40AM Wed, Feb 17, Hawes Hall 202 (Classroom) [03] 1:30PM Wed, Feb 17, Hawes Hall 202 (Classroom) TOPIC Co-founder Tensions, Assembling a Board: "Ockham Technologies: Living on the Razor's Edge" Ockham Technologies has grown to 10 people in six months and has landed a dream first customer, IBM. Ockhams success has caught the attention of several venture capital firms, and the company is close to deciding which financing offer to accept. Jim Triandiflou, Ockhams founder and CEO, is hesitant to have a large board and is worried about losing control of Ockham. Complicating the decision, tensions have been rising between Triandiflou and his remaining cofounder, who is currently vice president. Triandiflou believes that they can no longer be co-CEOs, and wants to hire a COO so his cofounder can focus on product management, but his cofounder disagrees. MATERIALS Ockham Technologies: Living on the Razor's Edge (804129) EC Weeks 3 on Packet A Note on the Legal and Tax Implications of Founders' Equity Splits (809110) Classroom Poll: "FD | Ockham Technologies" Please complete this poll by 7:00 am, class day. Poll: "FD | Case & Discussion FEEDBACK #1" Poll Open Date: 2/17/2010 at 3:00 PM Poll Close Date: 2/20/2010 at 1:00 PM After the Term Sheet (Optional) Sample Legal Document: Bylaws Source: Wilson Sonsini Goodrich & Rosati This is a sample document only and to be used solely as the basis for class discussion. Sample Legal Document: Certificate of Incorporation Source: Wilson Sonsini Goodrich & Rosati This is a sample document only and to be used solely as the basis for class discussion. Sample Legal Document: Restricted Stock Purchase Agreement Source: Wilson Sonsini Goodrich & Rosati This is a sample document only and to be used solely as the basis for class discussion. January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 11 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures ASSIGNMENT HARVARD | BUSINESS | SCHOOL Please complete the (very quick: 1 click + 1 line!) poll above, and think about the following questions: 1. Have Ockham's founders done a good job splitting the equity? Why? 2. Why have tensions been rising between Jim and Mike? 3. Should Ockham take the offer from the Texas Angel ($10M for 50% of Ockham) or the offer from Noro Moseley ($2M for 33%)? Why? End of Building the Team Beyond the Team: Investors and Other Outsiders What are the tradeoffs involved in attracting outside capital and other resources? How will my decisions affect my ability to keep control of my venture and also build its value? How should my motivations for becoming a founder affect which choices I make? [01] 10:05AM Mon, Mar 1, Hawes Hall 202 (Classroom) [02] 11:40AM Mon, Mar 1, Hawes Hall 202 (Classroom) [03] 1:30PM Mon, Mar 1, Hawes Hall 202 (Classroom) TOPIC Tradeoffs Beyond the Team: "Managing Segway's Early Development" For eight years, Dean Kamen has been developing the technology that underlies Ginger, a self-balancing human transporter that he later renames the "Segway." Kamen has decided to spin off Ginger as a separate company, has hired the former president of Chrysler Europe as CEO, and has spent two years building the company. However, major tensions have developed between Kamen and Ginger's senior team, and the company is facing problems with getting the product to market. MATERIALS Managing Segway's Early Development (804065) EC Weeks 3 on Packet VIDEO: Dean Kamen interview on 60 Minutes CNN.com: "Segway inventor reveals 'toughest question'" ASSIGNMENT Please read the case, watch the short video above, and think about the following questions: 1. Would you want to work for Dean Kamen? 2. Has Dean done a good job getting Ginger/"Segway" off the ground? (Reminder: I would really appreciate it if you could fill out the Case and Discussion Feedback Poll to give me feedback on our cases and classes so far. The link is available above with the "Ockham" materials. Thanks! I look forward to sharing the results with you in class.) January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 12 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Tue, Mar 2, Hawes Hall 202 (Classroom) [02] 11:40AM Tue, Mar 2, Hawes Hall 202 (Classroom) [03] 1:30PM Tue, Mar 2, Hawes Hall 202 (Classroom) TOPIC Founder-CEO Succession: "Founder-CEO Succession at Wily Technology" Before he accepts the new CEO position, Richard Williams wants founder Lew Cirne to also step down as chairman of the board. While considering Williams' incredible demand, Cirne reflects on everything he has already given up to get Wily Technology to this point. He agreed to step down as CEO and take what could be a largely symbolic CTO title. He also agreed to give Williams roughly as much equity as he himself owned and far more in salary. As the founder, CEO, and chairman of Wily Technology, Cirne had worked hard to build the skills necessary to lead his start-up. He had developed Wily's early technology single-handedly, had hired 50 employees to help him build his company, and had successfully spearheaded a strategic transformation of his company. He had led Wily to the point where several important customers bought its flagship product and had successfully raised two rounds of financing from top investors. Cirne wonders what he could have done to be pushed to the side like this. What should he do now? MATERIALS Founder-CEO Succession at Wily Technology (805150) EC Weeks 3 on Packet Poll: "FD | Founder-CEO Succession at Wily Technology" Please complete this poll by 7:00 am, class day. Academic journal article: "Founder-CEO Succession and the Paradox of Entrepreneurial Succession" (Organization Science, 2003) (Optional) ASSIGNMENT Please complete the poll above and think about the following questions: 1. Has Lew Cirne been a good CEO so far? Why? 2. As Lew Cirne, why would Richard Williams want to replace you as Chairman? 3. As David Strohm, if Lew rejects Richard Williams? demand and threatens to leave Wily, what should you do? January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 13 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Wed, Mar 3, Hawes Hall 202 (Classroom) [02] 11:40AM Wed, Mar 3, Hawes Hall 202 (Classroom) [03] 1:30PM Wed, Mar 3, Hawes Hall 202 (Classroom) TOPIC Post-succession Issues: "Les is More, Times Four" "I've had enough! I've decided that I need to resign," read the email from the founder of Webpoint to the company's board of directors. Les Trachtman, the CEO of Webpoint, has to figure out how to react to the founder's "it's Trachtman or me" ultimatum. Webpoint was Trachtman's fourth job as CEO, and in each case he had been hired as the first nonfounding CEO, taking over from the founder-CEO of a tight-knit founding team. Trachtman had first taken over from a mother and son team, then from two brothers, then from a wife and husband team, and now from serial co-founders who were best friends. From these ventures, Trachtman had learned how to manage founders who had strong relationships, but those experiences had not prepared him for the current situation. MATERIALS Les is More, Times Four (807173) EC Weeks 3 on Packet Poll: "FD | Les is More, Times Four" Please complete this poll by 7:00 am, class day. Rites of Passage (Optional) ASSIGNMENT Please complete the (quick) poll above, and think about the following questions: 1. Across his four experiences taking over from founder-CEOs, what has Les Trachtman done well? Done poorly? 2. What should Les do now? January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 14 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Mon, Mar 8, Hawes Hall 202 (Classroom) [02] 11:40AM Mon, Mar 8, Hawes Hall 202 (Classroom) [03] 1:30PM Mon, Mar 8, Hawes Hall 202 (Classroom) TOPIC Tradeoffs Throughout the Life Cycle of the Venture: "The Tale of the Lynx (A)" The founders of Lynx Solutions have survived tensions within the founding team, the firing of Lynx's founder-CEO, and a crisis sparked by media allegations that it had been spying on its users. Now the founders are considering a proposal from one of their directors to make a dramatic shift in the venture's strategy and have to decide how to react. MATERIALS The Tale of the Lynx (A) (807151) EC Weeks 3 on Packet The Tale of the Lynx (B) (807152) Classroom Poll: "FD | Tale of the Lynx" Please complete this poll by 7:00 am, class day. Academic journal article: "Stewards, Agents, and the Founder Discount: Executive Compensation in Entrepreneurial Ventures" (Academy of Management Journal, 2006) Websites' rivalry provides lesson about sharing strategy by Scott Kirsner, Boston.com ASSIGNMENT 1. How have James Milmo's decisions differed from the decisions made by the other founders we have studied? 2. Should James accept the proposal to shift strategies? 3. What issues should James be most worried about now? January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 15 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Tue, Mar 9, Hawes Hall 202 (Classroom) [02] 11:40AM Tue, Mar 9, Hawes Hall 202 (Classroom) [03] 1:30PM Tue, Mar 9, Hawes Hall 202 (Classroom) TOPIC Choices Across Ventures: "Evan Williams: From Blogger to Odeo" For several months, founder-CEO Evan Williams has felt trapped, unable to control Odeo and its strategic direction. He longs for the simple days of Blogger, the previous venture he had co-founded. Although his Blogger experiences had included a major blow-up with his co-founder that had resulted in legal proceedings, a brush with near-bankruptcy, and the laying off of his entire team, Williams has become even more disillusioned with his current venture, Odeo. Odeo, a podcasting pioneer, had debuted almost two years before and had gotten off to a very strong start, with a high-profile debut at a prominent industry conference, coverage on the front page of the New York Times Business section, and the raising of a large round of financing from a top-tier venture capital firm. His attempts to find an acquirer have failed, layoffs have begun, and he is now facing a meeting with an increasingly hostile board of directors. At that meeting, he is very tempted to resign so he can move on to his next project and regain the thrill of being an entrepreneur. MATERIALS Evan Williams: From Blogger to Odeo (A) (809088) EC Weeks 3 on Packet Evan Williams: From Blogger to Odeo (B) (809093) Classroom Poll: "FD | Case & Discussion Feedback #2" Poll Open Date: 3/9/2010 at 3:00 PM Poll Close Date: 3/13/2010 at 1:00 PM ASSIGNMENT 1. How has Evan Williams gotten into this mess? 2. What should Evan do now? January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 16 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Mon, Mar 22, Hawes Hall 202 (Classroom) [02] 11:40AM Mon, Mar 22, Hawes Hall 202 (Classroom) [03] 1:30PM Mon, Mar 22, Hawes Hall 202 (Classroom) TOPIC Module Reflections for "Beyond the Team" MATERIALS The Founder's Dilemma, Harvard Business Review, February 2008 (R0802G) Classroom Rich Versus King: The Entrepreneur?s Dilemma (Academic paper, from the 2006 Best Paper Proceedings of the Academy of Management) ASSIGNMENT 1. Read "The Founder's Dilemma." To what kinds of ventures and founders do Rich-versus-King tradeoffs most apply? To what kinds of ventures and founders do Rich-versus-King tradeoffs least apply? 2. Your VC firm has asked you to interview a first-time entrepreneur to figure out if s/he is more King-motivated or Richmotivated. What's the most informative-yet-concise question you could ask that entrepreneur to begin figuring it out? 3. Before class, I will email you your answers to 3 pre-class polls. Are there any patterns in your answers to those polls? End of Beyond the Team: Investors and Other Outsiders January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 17 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL When to Found At what point in my career should I start a company? What are the pros and cons of different career paths vis-à-vis my ability to successfully start and run a new venture? [01] 10:05AM Tue, Mar 23, Hawes Hall 202 (Classroom) [02] 11:40AM Tue, Mar 23, Hawes Hall 202 (Classroom) [03] 1:30PM Tue, Mar 23, Hawes Hall 202 (Classroom) TOPIC Career Reflections and Discussion: "Careers Panel" MATERIALS Poll: "FD | Careers Panel Preparation" This poll was originally posted on March 9. It is also available on the resources tab. Poll Open Date: 3/19/2010 at 9:00 AM // Poll Close Date: 3/22/2010 at 4:00 PM Poll: " FD | Careers Panel Reflections" Poll Open Date: 3/23/2010 at 3:00 PM // Poll Close Date: 3/27/2010 at 11:00 PM ASSIGNMENT 1. Please think back to the career issues we examined in the first module of the course and the career decisions we have seen our protagonists make in the two modules since then. 2. Review the bios of our panelists (distributed in the prior class) and then complete the "Careers Panel Preparation" poll above. 3. The day of the panel itself, please bring the "panelist question" you submitted in the poll, and be ready to ask it if necessary. 4. After the panel, please complete the "Careers Panel Reflections" poll about your biggest takeaway from the panel. End of When to Found Achieving the Entrepreneurial Ideal How have some founders managed to build valuable ventures while still maintaining control of them? What general lessons can we learn from these founders about the decisions we should make at the outset and throughout the building of our ventures? [01] 10:05AM Wed, Mar 24, Hawes Hall 202 (Classroom) [02] 11:40AM Wed, Mar 24, Hawes Hall 202 (Classroom) [03] 1:30PM Wed, Mar 24, Hawes Hall 202 (Classroom) TOPIC Case: "Knight the King: The Founding of Nike" January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 18 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures End of Achieving the Entrepreneurial Ideal HARVARD | BUSINESS | SCHOOL Achieving the Entrepreneurial Ideal How have some founders managed to build valuable ventures while still maintaining control of them? What general lessons can we learn from these founders about the decisions we should make at the outset and throughout the building of our ventures? [01] 10:05AM Tue, Mar 30, Hawes Hall 202 (Classroom) [02] 11:40AM Tue, Mar 30, Hawes Hall 202 (Classroom) [03] 1:30PM Tue, Mar 30, Hawes Hall 202 (Classroom) TOPIC PROJECT WEEKS Classes will not meet the weeks of March 29 and April 5, so that you can focus on your course projects. End of Achieving the Entrepreneurial Ideal January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 19 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL Achieving the Entrepreneurial Ideal How have some founders managed to build valuable ventures while still maintaining control of them? What general lessons can we learn from these founders about the decisions we should make at the outset and throughout the building of our ventures? [01] 10:05AM Mon, Apr 12, Hawes Hall 202 (Classroom) [02] 11:40AM Mon, Apr 12, Hawes Hall 202 (Classroom) [03] 1:30PM Mon, Apr 12, Hawes Hall 202 (Classroom) TOPIC Case: "Rubbish Boys" It looked like founder-CEO Brian Scudamore might not be able to pursue franchising as a growth option for his junkremoval business after all. Over the years, he had overcome many hurdles, including buying out his "too-fiery" cofounder, firing all of his employees so he could start all over again when he became disillusioned with the company's developing culture, and failing at experimenting with student franchising to increase the rate of growth. Now looking to expand within North America, he had turned to a professional franchising model and had developed a new brand to help grow the business. Paul Guy, his first franchisee who was beginning his operations in Toronto, had just called. "Brian, my wife's relative just told me that I'm crazy to open here because the city picks up things for free. It's crazy to charge $300 to pick something up when they can get the same service for free! We had never heard of that in Vancouver, but that's a big problem here!" Was Guy over-reacting, or had Scudamore made a major mistake in his growth strategy? MATERIALS Rubbish Boys (808101) EC Weeks 3 on Packet Poll: "FD | Rubbish Boys" Please complete this poll by 7:00 am, class day. ASSIGNMENT Please complete the poll above (1 click + 1 line) and think about the following questions: 1. If you had one or two words with which to describe Brian Scudamore, what would they be? 2. What was at stake in the negotiation between Brian and Paul Guy over the franchising agreement? 3. What should Brian do now? January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 20 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL [01] 10:05AM Tue, Apr 13, Hawes Hall 202 (Classroom) [02] 11:40AM Tue, Apr 13, Hawes Hall 202 (Classroom) [03] 1:30PM Tue, Apr 13, Hawes Hall 202 (Classroom) TOPIC Case: "Lather, Rinse, Repeat": FeedBurner's Serial Founding Team "Is this the right time or is it still too early?" Dick Costolo wondered as he reflected on the latest acquisition offer. He had been building FeedBurner with his three co-founders for almost four years and was staring at the details of an acquisition offer from Google. He and his co-founders had founded three prior ventures together, each of which had had increasingly attractive outcomes, but none of which had reached their full potential. MATERIALS "Lather, Rinse, Repeat": FeedBurner's Serial Founding Team (809089) Classroom ASSIGNMENT 1. What mistakes did Dick Costolo and his co-founders make during their first three ventures? How have those experiences shaped their approach to founding and building FeedBurner? 2. What should Costolo do now? [01] 10:05AM Wed, Apr 14, Hawes Hall 202 (Classroom) [02] 11:40AM Wed, Apr 14, Hawes Hall 202 (Classroom) [03] 1:30PM Wed, Apr 14, Hawes Hall 202 (Classroom) TOPIC Case: "Nantucket Nectars: The Exit" The founders of Nantucket Nectars are trying to decide whether and how to sell their company. MATERIALS Nantucket Nectars (898171) ASSIGNMENT 1. If you were Tom & Tom, what is the minimum price you would accept for Nantucket Nectars? 2. If you were a potential acquirer, how could you convince the founders of Nantucket Nectars to sell their company to you? 3. Role-play preparation: Prepare to be a potential acquirer who is pitching Tom & Tom to accept your offer. End of Achieving the Entrepreneurial Ideal January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 21 of 22 COURSE PLATFORM Syllabus for Founders' Dilemmas: Money and Power in Entrepreneurial Ventures HARVARD | BUSINESS | SCHOOL Semester Wrap-up [01] 10:05AM Tue, Apr 27, Hawes Hall 202 (Classroom) [02] 11:40AM Tue, Apr 27, Hawes Hall 202 (Classroom) [03] 1:30PM Tue, Apr 27, Hawes Hall 202 (Classroom) TOPIC Course Wrap-up Forward-looking Reflections ASSIGNMENT During this Course Wrap-up Day, we will discuss the lessons we've learned about the most critical early choices faced by founders, and reflect on their implications for each of you over the next few years. (We'll also have a top-ten list or two and some other fun items. :->) We will extend these reflections by tapping the new insights gained from your projects, and then I'll have some final thoughts of my own to end the semester. End of Semester Wrap-up January 12, 2010 Copyright 2010 President and Fellows of Harvard College Page 22 of 22