June 2021

Tom Eisenmann teaches entrepreneurship at Harvard Business School (HBS), including a course on startup failure. In Why Startups Fail, he has tapped into the rich network of HBS grads who have started companies to uncover six reasons why many of those startups failed. More importantly, he has deeply explored the decisions that entrepreneurs make along the startup journey, the tradeoffs involved, and how to approach those decisions in a way that increases the likelihood of success. In short, while the six patterns that account for most startup failures provide the title for the book, the really valuable lessons taught in the book are reflected in the book’s subtitle.

Why Startups Fail has become one of my favorite books to recommend to entrepreneurs. The first third of the book covers the decisions that early stage startups face and the three patterns that lead to failure during that phase. The second third covers the decisions that scaling startups face and the associated failure patterns. The final section of the book deals with the challenges founders of failing startups face, both in the wind-down and beyond. As an entrepreneur, wherever you are in that journey, this book has valuable lessons for you.

Read the full review here.

The Six S framework is another tool introduced by Tom Eisenmann in his book Why Startups Fail. He uses this framework to identify the most likely reasons that later-stage startups might fail. My perspectives differ slightly from Eisenmann. I see three of the six S’s (Speed, Scope, and Series X) representing the three dimensions that define has a VC-backed startup might scale. I see the other three (Shared Values, Staff, and Structure) representing the level of internal maturity of the business.

As Eisenmann points out in his book, the different dimensions of scaling all have benefits, but can also introduce significant (even fatal) challenges for startups. I believe that a business that has well established Shared Values, a well defined Structure, and the right Staff for the company’s current level of development, is well positioned to manage the challenges of rapidly scaling.

In practical use, I see the framework serving almost like a “pre-flight” checklist, regularly examined by leadership. Many industries have adopted safety checklists to avoid catastrophic disasters. I’m glad that entrepreneurs now have their own framework for doing the same.

Read the full article here.

In Why Startups Fail, Tom Eisenmann introduces the Diamond-and-Square (DaS) framework. Like the Business Model Canvas (BMC), the DaS represents the value proposition, the marketing activities that drive customer acquisition and retention, and the technology and operations (resources and activities) that all translate into the revenues and costs that feed a profit formula. 

Unlike the point-in-time perspective of the BMC, the DaS reflects the necessity for the startup to gain the resources necessary and apply those resources successfully to achieve a sustainable profit formula. The DaS and the BMC are complementary. Entrepreneurs should be thankful to have the Diamond-and-Square framework to add to their toolbox in building and scaling a successful startup.

Read the full article here.

For today’s podcast episode, I talk to Tolu Oridota, co-founder and chief technologist of Koalie. Tolu recently took a major step in his career, leaving T-Mobile to join Bryght Labs, and his experience with his side-gig, Koalie, played a key role in that move. Tune in to episode 9 to hear Tolu describe the major pivot that Koalie recently made and the lessons he’s learned through the process.

Listen here.