Memo 01: The Founder’s Dilemma in the Wild
In entrepreneurial circles, few frameworks are as immediately useful as Noam Wasserman’s “The Founder’s Dilemma” [1]. At its core, the dilemma describes a tension every entrepreneur eventually faces: Do you want to be Rich, or do you want to be King? Some founders optimise for wealth creation — building a valuable, scalable business that may eventually attract outside capital, bring in professional management, and grow beyond their personal control. Others optimise for autonomy and control — they want to be in charge, keep decision-making tight, and often measure success less by revenue or valuation and more by independence. Neither strategy is inherently right or wrong. But the failure to consciously choose — or the attempt to blend both — often results in organisational gridlock, missed growth opportunities, and deep frustration.
Real-World Reflections on the Dilemma
I was recently working with a third-generation manufacturing business. Growth had plateaued, working capital was tightening, and the factory was running at about 50% capacity. On the surface, the issues looked operational or financial. But after a few conversations with the owner, the true bottlenecks emerged:
No one was accountable for sales.
Business development was ad hoc, squeezed in when the owner had time.
There was no active R&D, because the technical team "just wasn't interested."
When I asked the owner why this situation had been allowed to persist, his answer was telling: "I like the control. I don't trust other people to do as good a job as me."
And there it was. The owner was prioritising autonomy and control over growth and profitability. As long as things were ticking along, he was content. Profit maximisation was a secondary concern.
Contrast this with another manufacturing business we recently worked with. The founder there had a very different perspective. "It's the product innovation I love," he told me. "Developing new products for new markets — that's where I get energy."
Crucially, he had built a strong management team that could operate the business without his constant involvement. Sales, operations, and finance were owned by capable leaders. The result? The business is number one or two in its core markets, continues to grow aggressively, and has several private equity firms circling.
This founder had made a different choice: to trade some control for the opportunity to scale, generate wealth, and build an enterprise of enduring value.
Choosing Your Path: King or Rich?
The Founder’s Dilemma isn’t just theoretical. It plays out in hiring decisions, capital raises, board structures, and day-to-day workflows. The key is intentionality.
If you don’t clearly know which path you’re on, you risk:
Building a business that neither scales nor satisfies you
Hiring people you won’t fully empower
Rejecting opportunities that conflict with your (unspoken) preference
Undermining your team through mixed signals
Checklist: Are You a King or Rich Founder?
Ask yourself:
Do I struggle to delegate even minor decisions?
Do I resist bringing in outside investors or executives?
Do I hire support staff or leaders?
Am I more excited by ownership or by scale?
Would I take a smaller personal stake if it meant a larger company?
Warning signs you’re caught in the middle:
You hire great people, then override them.
You attract investor interest, but never follow through.
You say you want growth but resist letting go.
Structuring the Business Around Your Intent
If you’re a King:
Build a lean, controllable structure
Keep ownership consolidated
Avoid complex capital stacks or external boards
Focus on profitability and independence
If you’re pursuing Rich:
Recruit senior leaders you trust (and empower them)
Prepare for equity dilution in service of scale
Build systems and governance that allow you to step back
Accept that your role will evolve or shrink over time
Atlassian: A 'Rich' Founder Success Story
Atlassian, the Australian software giant founded by Mike Cannon-Brookes and Scott Farquhar in 2002, stands as one of the clearest and most successful examples of the 'Rich' or wealth-optimising path. Rather than prioritising personal control over the company (the 'King' strategy), the founders embraced external capital, professional management, and scalable infrastructure to build long-term enterprise value.
Recognising the 'Rich' Strategy
From early on, Cannon-Brookes and Farquhar showed a willingness to prioritise growth over control. Despite bootstrapping the company initially using personal credit cards, they later accepted external investment from Accel Partners in 2010—a $60 million injection that facilitated further international expansion and product development.
Giving Up Control
The co-founders retained key leadership roles but were never possessive about maintaining absolute control. By the time Atlassian listed on the NASDAQ in 2015, the company had developed a robust governance framework and was structured in a way that could support scale. They remained major shareholders, but the company’s management was professionalised and not centred on their direct control.
Building a Scalable Management Team
Atlassian grew its executive ranks by hiring experienced leaders from top-tier global tech companies. The founders focused on strategy and culture while empowering teams to manage operations, product development, and go-to-market functions. This decentralised leadership model enabled innovation at scale and supported the company’s global ambitions.
Outcomes
Atlassian is now a multi-billion-dollar public company with over 300,000 global customers. Cannon-Brookes and Farquhar are among Australia's wealthiest individuals, but their success came not from holding on tightly to control, but from letting go of it strategically.
Lessons from Atlassian
Founders who aim for the 'Rich' path must be willing to dilute equity and decentralise control.
Scaling globally requires external capital and experienced leadership.
Culture and long-term vision can remain founder-led even in professionally managed businesses.
The transition from founder-centric to systems-centric management is essential for sustainable success.
Final Thought
There is nothing wrong with wanting to remain hands-on and in control — nor with dreaming of an exit and scaling to the moon. But confusion, contradiction, and lack of clarity is where businesses falter.
Choose intentionally. Structure accordingly. And make sure your team knows which game you’re playing. Because in the long run, the market rewards clarity — and punishes indecision.
[1] Wasserman, N. (2012). The founder’s dilemmas: Anticipating and avoiding the pitfalls that can sink a startup. Princeton University Press.