A Founding Team’s Foundation

IDEA: Northeastern University’s Venture Accelerator was founded in 2009. In the seven years since, it has seen ~800 separate ventures come through it’s doors made up of founding teams ranging in size from a single person to a half-dozen. Of those, 44 have graduated out of the program and launched themselves into the greater ecosystem outside of Northeastern University.

What do those 44 launched ventures have in common?

It’s certainly not the industry. From healthcare and medical devices to consumer apps to apparel, IDEA ventures have seen success in every industry imaginable. It’s not any specific background that predicts success. Every background from nursing to business to engineering has been able to propel themselves forward.

So what is it?

The most compelling argument is that there’s an unquantified quality, an “X factor,” that a founding team either has or acquires in their early development that leads to their success. That quality can be divided into two categories: the individuals of the founding team, and how those individuals work as a team.

The Founder

When looking at each individual that’s a part of a company’s founding team, the first question is whether or not that individual’s tangible skills align with the needs of the company. Having experience that’s relevant to that company is the low hanging fruit — it’s the obvious first answer. By no means does that mean that you need 20 years of running a distributor to start a food and beverage company — but some experience in the field is usually necessary. It’s tough to break into medical devices if you don’t know healthcare and it’s tougher to build an app if you can’t code.

Outside of any specific field, an industry agnostic skill set can be used to the advantage of founders. For example, one of the most common business models of today’s disruptors is the marketplace connection (Uber, AirBnb, etc.). User A has a product that User B wants, but without some level of technology it’s tough to bridge that connection and create that transaction. In this example, an individual with some experience in relational databases would probably be better suited to tackle that market opportunity than a marine biologist.

Acknowledging the advantage of an aligned skill set is important, but equally valuable is the realization that industry knowledge can be learned and experience can be gained — with time and resources. A factor that is often overlooked (especially by college students) when starting a company is time. Time to talk, time to learn, time to make or create. As sexy as ‘CEO’ looks on a resume, it’s important that one has the time to dedicate to their venture, and the resources to support themselves while they’re not doing other things.

That being said, resources go far beyond a bank account that can take a beating during an extended “boot strap” phase. Things like job flexibility and connections to a relevant community go a long way. Even having your geographic location be aligned with industry experts — it’s a lot easier to grab coffee to ‘pick the brain’ of an industry veteran if you don’t have to hop on a plane to do so (this would also explain the startup migration to Silicon Valley). The most successful teams will acknowledge their resources and take advantage of them.

The final factor in looking at the individual is the simplest and most important — but also the hardest to quantify. The final factor is hustle. Every ‘no’ provides energy, and every ‘yes’ is a celebration. Being on the founding team of a startup means beating every other team working on solving the same problem. In the words of the first salesman at a current Series C company, “When you’re first starting out, the only criteria is an absolutely maniacal passion to grow the business.”

The Founding Team

While the individuals are important, the way a founding team works together may have an even greater impact on the eventual success of their company. While there’s still an unquantifiable ‘X-factor’ for the interactions of a team, there are some key factors to evaluate.

Most founders start companies with their colleagues or friends or connections — this means there’s a level of commonality they share to some degree. For soft skills this is a good thing. Having similar communication styles, an aligned level of time commitment, geographic location, equal investment, etc. generally lead to smooth(er) sailing. After all, if the stereotype is true, you’ll be spending 100+ hours a week together in a Silicon Valley garage for the foreseeable future — working together and in harmony relies on these similar personality characteristics.

That being said, there are many traits that would be ideally unique to members of the founding team. Similar to having a skill set that’s relevant to the company, it’s also advantageous to have individual talents that provide a wide range of value. The typical trope is the ‘tech guy’ and the ‘business guy’ or the one that builds the product and the one that sells it. The reason that format is so popular is that it’s the two major buckets to start a business — these teams cover as much ground as they can with the smallest amount of people, letting them move quickly and stay (in the industry’s most overused word) lean. There’s an infinite number of problems that a startup will face, and the more problems a team is prepared for right away, the faster they can solve that one and move on. (and up…exponentially of course)

To combine those two points, a team must recognize their separate talent sets and be able to effectively maximize the impact of everyone’s expertise. “Productive Disagreement” is an appropriate term used when making decisions. It’s up to every individual to question and clarify the decision of their co-founders, but also to recognize that decision is up to the person with the most expertise. For example, the CEO shouldn’t micromanage product, and the CTO should trust the CEO to communicate value appropriately. These decisions shouldn’t be made in a bubble, but if the founding team agonizes over the smallest of decisions, the company is destined for the classic “paralysis by analysis.” By having personality and communication styles overlap, with expertise that sits in separate buckets, a team can avoid needless friction and focus on what they deem is most important.

So what?

So you’re the founder of an early stage company and want to know where you stand? One of the most valuable exercises for a founding team to participate in is called a Gap analysis. It’s named appropriately, and is used to identify gaps — otherwise known as advantages and disadvantages.

There are plenty of other resources to effectively complete a Gap analysis, but briefly:

• What are your greatest strengths? Is that unique to your team? Is it a meaningful strength?
• What are your biggest weaknesses? What is your plan to make up for it?

There are very few truly new ideas, so in a crowded industry, what is it that makes YOUR team THE team that will realize success?