At the 9Others dinner, 16 July, one of the challenges for entrepreneurs was to bring someone into the founding Startup Team. Although I didn’t have many ideas, it got me thinking about team building. This theory is also supported by the view. NYU Stern Professor Jason Greenberg concludes that 65% percent of Startup failures can be attributed to problems within the team rather than market or product failures. I’ve written before about how virtual teams are in making decisions regarding Startup investments. I believe this to be true for most investors. What makes an excellent Startup team?
Leadership is essential for teams. While this doesn’t necessarily mean that someone must be “in charge,” it does require ambition and direction for any task. Leadership is also about following. The leader must be the one who is giving the advice. Others need to follow him or her for the moment. Another important fact is that you should not forget. There can’t be any leaders in a team that is only one person.
It is essential to have a range of skills and a balance. A team of three people who love coding but are not skilled in marketing or strategy is not the best. You need to have a minimum of technical skills in order to create the product and some sales or marketing skills. A bonus is the ability to manage projects and operate effectively. Although creativity and strategic thinking are essential, they can also be acquired from multiple founders.
Two people with a history working together, similar financial standing, and mutual respect are the ideal founding team. One person is great at building products, the other at selling them.” – Naval Ravikant, Founder AngelList.
No matter how many people there are, it will still be a small group. This is why it is important to have chemistry among them. While you can list the skills needed, it is not possible to combine them. An exemplary past record of cooperation (and not trying to kill each other! While this is the best indicator, it may not be possible. Another thing I watch out for is inclusivity. If the group doesn’t value everyone’s ideas, it is probably not working. This is crazy. It is also a waste of resources if you have only three people.
Logically, you might assume that passion for the company would be a sign of an effective team. Passion is essential, and Startup pitches often feel the most enthusiastic when they have it. But, just because someone is passionate doesn’t mean they can harness their passions together. Be careful not to rely solely on this.
Passion is equally essential as commitment. A great Startup takes a lot of hard work. Even more challenging is a failing Startup. For the duration, the core founding team must be present. The way equity is divided in the company can make this a problematic aspect. There is no one correct answer, and each person is responsible for their own value. It is up to the team to decide. However, as an investor, I will ensure that founders are motivated to share their shares.
Take care of the gap.
This is a long list and could easily be extended. One article that I came across offered 101 tips to help you build a Startup team. Keep in mind that every team will have gaps. Actually, I actively seek out gaps. I don’t believe a team that has no holes is trying to fool me. One of the most dangerous mistakes you can make is not to recognize your weaknesses.
One last thing is more important than all others. It is the only gap that cannot be filled. Action. It’s easy to make friends. It is easy to create a group of friends, but it takes a lot more work to build a business team. Startup teams must do things. Not necessarily fast, and not always right. But, there is no progress without taking action.