The Company You Keep

Hiring a team, not just employees

By Connected Lab CEO Mike Stern

What do the early cast of Saturday Night Live, PayPal’s founding team, and the ’64-’75 UCLA basketball team all have in common? If it wasn’t obvious yet, it’s that they were extremely well-built teams. They kicked-ass together, not just once or twice, but a lot, and no single person or victory overshadowed their collective legacy.

For Connected Lab’s first blog post I chose to focus on team-building and why it matters so much to us. We’re passionate about other things too, like making our clients successful, and building enchanting and impactful products. But the number one thing we focus on is our team; everything else follows from that. If you’re a new grad entering the workforce, or an entrepreneur trying to build your own team, then this post is for you.

The Connected Lab team: 6 months in

To date, we’ve received over 1200 resumes. Out of that, we’ve hired 30 exceptional individuals. It takes a lot of work to build a recruiting pipeline this big and recruit the right applicants, but we spend even more time on team dynamics: company-wide ‘Disconnect’ retreats, pair-programming and playing games and sports together are just a few examples of how we bake team-building into our process. With all of the other demands on our time, why spend so much of it on the team?

For ‘Disconnect 1’ we headed into rural Ontario. Pictured here: Three co-ops in the wild about to go boating.

10x teams > A bunch of 10x’ers

In 2011 Avichal Garg wrote an excellent blog post here about ‘10x teams’. Building 10x teams, Garg argued, should be a founder’s objective, not just amassing a bunch of 10x’ers. It’s a refreshing perspective and well-supported by data. His blog post boils down to a simple theory:

Great teams produce drastically better output than the sum of their parts, and, as a result, are much more valuable and desirable.

Peter Thiel, founder of PayPal and Palantir, recently shared the same sentiment with the young crowd at the Launch festival last March. He said that founders should spend just as much time perfecting team dynamics as they do on finding the right people in the first place. While this all seems very sensible, and almost obvious, why do Theil or Garg even bother making the point?

The headlines hype the ‘Star Player’, while the ‘Team’ gets no love

The most celebrated stories in business and tech tend to be written about individualistic successes, or the next great ‘gadget’ or ‘app’ and the founder behind it. Everyone loves a hero, and so this type of story fits nicely in a package — it’s easier to write about and easier to digest. But as we repeatedly oversimplify success-stories, I think it skews the value we place on heroes vs teams. As a result, job descriptions and resumes tend to be filled with ‘Rockstar’, ‘10xer’, and ‘Leader’, while recruits rarely highlight their ‘team experience’, and founders rarely promote their ‘team-focused culture’. New grads and founders seem to value team dynamics the least, even though they have the most to gain from joining or building great teams early in their careers.

Backstory: scaling small teams at Xtreme Labs

At 25, I got my first taste for great software teams when I joined a small mobile start-up called Xtreme Labs in 2010. In 4 quick years our Toronto HQ grew from 10 to 350 people and along the way we helped build some of the most ubiquitous software products on the planet, including client work with Facebook, Uber and Groupon. While there were many ‘Star-players’ at Xtreme, and loads of headline-grabbing apps that we shipped, all of the magic happened in small teams — both internally and with our clients. Team-work was where the rubber hit the road. I was fortunate to be in dozens of these small teams while I was there, and also to learn how to scale a business from a single small team into a collective of many small teams. This wasn’t why I joined Xtreme, but in hindsight it’s what I value the most.

From left to right: Alex Christodoulou, Jackson McConnell, Damian McCabe, Mike Stern. In case you are wondering, it is a granola bar.

Shortly after Connected Lab was founded, Damian McCabe, the first Product Manager I hired at Xtreme, asked to join as our Co-Founder to help build the product design and engineering teams — we signed the contract just two days later. A month after that, one of Damian’s old Xtreme teammates, Alex Christodoulou (one of the best iOS developers in the country, but, more importantly, a phenomenal pair programmer and mentor) asked to join. He signed a week later and now spearheads our ‘connected devices’ initiative in Shenzhen.

Two years ago, we never imagined that we’d end up building this business together. But now it feels natural and we’re moving really quickly, in large part because of shared values around team-building that we brought to the table from day one.

‘The Mafia Effect’

When I started writing this I made a quick LinkedIn search to see what past Xtreme employees were up to. The results weren’t surprising; since the acquisition of Xtreme Labs in 2014, 15 other startups have been being created by Xtreme ‘alumni’, and many others from Xtreme have moved into exciting new roles at our acquirer, Pivotal. Evidently, the ‘Mafia effect’ is happening in the wake of other Canadian success stories too, like in Waterloo, Montreal, and Vancouver.

If you’re a new grad and looking for your next opportunity, it might be wise to invest more time than you previously thought into finding a great, winning team, no matter how small (and often the smaller the team, and less defined the org chart, the better). If you do find the right team, it will likely grow into something much bigger, paying dividends for your career long after you’ve left.

Weekly Internal Demos, January 2015.

For founders, building great teams gets easier if you become a lightning rod

I’ve seen managers reject the need for good team-building by appealing to a ‘nature over nurture’ argument and saying things like, “Reid Hoffman would still be as successful today if he wasn’t originally at PayPal.” The same might be said about the long list of breakout stars from SNL or UCLA Basketball. While there’s a sense on one hand that these stars were a product of their alma mater, there’s a sense on the other hand that some were destined for greatness anyway. It’s impossible to prove either way, and whether they were ‘produced’ or just ‘enhanced’ doesn’t really matter and misses the point. The good news is that when great, winning teams gain reputations, they start to attract people on their own. Indeed, it’s precisely because recruiting is so hard — especially finding world-class people who are a good fit and still want to get better — that focusing on team-building becomes so important to retain and attract great teammates. Every founder should want their company to be a ‘lightning rod’ for the right people. This requires being known for nurturing great talent, not just finding it.

The Path Forward

Dinner after ‘Disconnect 2’: Most of the team is pictured here after championing an Escape Room.

While I’m not claiming that some of the Canadian successes above have come close to the scale of PayPal’s legacy, they hold a similar pattern: great teams breed follow-on success. Things get easier down the road, whether it’s finding your next opportunity, attracting talent, or leveraging tried-and-true tools and processes. For me, being part of a collaborative and winning culture was addictive, and the passion I developed for team-building was one of the main reasons I started Connected Lab. We have a long way to go, but our success so far is the result of an incredible founding team that I’m lucky enough to go to work with every day. We look forward to sharing updates on our team and observations on team-building as our journey unfolds.

@mstern is the CEO of Connected Lab. Previously he founded MakeWorks, Toronto’s first ‘Shared R&D Lab’ for connected devices startups, and was an early employee at Xtreme Labs, where he helped grow the company until it was acquired by Pivotal in 2014.