# The Second Startup: Founder to CEO **EPS 35XX · Babson College · Prof. Ben Spigel** **Fridays 9:30 - 12:30** *Prerequisite: FME 1000/1001 or EPS 1000 (or permission of instructor)* Questions? [E-mail Ben for more info](mailto:[email protected]) --- ## The Big Idea You've been taught how to start a company. Almost nobody teaches you what happens next. Growth is the number one killer of companies. Not bad ideas. Not tech failures. Not founder disagreements. *Growth*. Firms that find traction get over-extended, run out of cash, or hire the wrong 20 people in the wrong six months. And the founder's job changes with the company: the person who did everything has to become the person who leads everyone. Most founders either lose the company or lose control of it. This class is about that transition. The daily tactics of running a company that is getting bigger faster than you are. --- ## What You'll Know How to Do After This Class - Tell the difference between linear, episodic, and hypergrowth — and judge whether the growth in front of you is worth chasing - Run a structured hiring interview, design a comp plan, and build processes that survive headcount tripling - Read a term sheet and spot what it costs you at each stage - Design hiring, culture, and org systems that scale instead of breaking - Actively manage a board of directors, instead of being managed by one - See a growth-driven cash crisis coming before it arrives --- ## How the Class Works This class doesn't depend on cases or one off examples of big successful companies. In this class, you are in charge of a virtual company and will pilot it through 13 different scenarios. You make every choice and every choice influences the future of your company. You start with 5 employees. You're trying to get to 500. Can you grow a company that much while still surviving as the CEO? - **Each week you get the company's inbox** — emails and documents from employees, board members, investors, customers — and you decide what to do. - **Then you justify it to your board.** You'll give a 5 minute presentation to your board explaining what you decided and why. - **Outcomes compound.** The decisions you make in week 3 are still shaping your company in week 13. Decisions range from small to company-defining (sales comp structure, taking or walking away from a term sheet, what goes in the employee handbook). None of them have a clean right answer. Some teams end the semester at scale. Some stall out. Some run out of money. Guest talks from founders who scaled to profitable exits, and founders who didn't will will help you understand not just what entrepreneurs do, but what it's like to make the hard decisions under uncertainty. --- ## Assignments | Assignment | Individual / Group | Weight | When | | ---------------------- | ------------------ | ------ | ------------------------- | | Class participation | Individual | 20% | Weekly | | Scenario reports | Group | 10% | Once per week | | Scenario presentations | Group | 20% | Rotating | | Reflective diaries | Individual | 20% | 2 days after scenario day | | Founder biography | Individual | 30% | Exam period | - **Scenario reports** — your team's decisions for the week. Graded on completeness, not on being right. - **Scenario presentations** — 5 minutes defending your choices. Graded on how convincing you are. - **Reflective diaries** — one page, written in the voice of your founder: why you decided what you decided, and what's keeping you up at night. - **Founder biography** — a 7-page biography of your company. Did you hit your original goals? How did you survive what came at you? No exams! All readings are on Canvas. Bring a laptop every week to work on the scenarios. --- ## Weekly Topics | # | Topic | | --- | --------------------------------------------- | | 1 | Growth and the Entrepreneur | | 2 | Managing a Board | | 3 | Early Growth | | 4 | Project Management for Entrepreneurs | | 5 | Building Growth Teams | | 6 | Financial Options for Growth | | 7 | Creating Organizational Processes | | 8 | Entrepreneurial Leadership & Culture Building | | 9 | Reading Term Sheets | | 10 | Alliances and Partnerships | | 11 | From Founder to CEO | | 12 | Stock Options | | 13 | Remaining Entrepreneurial | --- ## FAQ ### 1. What's the point of running a fake company? Why not just learn from real world examples? Cases are great! But they don't tell the whole story. In this class, I want you to experience all the complexities of growth at every different stage of a company's existence. You'll be able to see how early decisions affect the future of a company and how leading a small firm of 10 people can be very different from leading a much bigger organization of 250 people. ### 2. Is this a tech entrepreneurship class? No! This class is about the challenges of growth, no matter if you're a software company, a family business, or a service company. We focus on issues that every company faces as they grow, like hiring and firing, building processes, and creating supportive company cultures. You don't need to know anything about technology to take this class. But you do have to be an entrepreneurial and strategic thinker. ### 3. Does this class have group projects? Kind of! You'll work with partners in the class to deal with each week's scenarios. You'll make decisions and do in-class presentations together. But there's no group work outside of class. The main assignments are individual. ### 4. You know this class is on a Friday, right? What's up with that. I know! It wasn't my idea. But, the nature of the class means that we'll be easily able to move online for the classes before spring break and other Babson holidays. So, you'll still get out of here on πtime.