Know What You Know (And Don’t Know)
Having a well-rounded team that knows what they don’t know as well as what they do know is vital to a company’s success.
Blanca Rodriguez is a member of Rough Draft’s student team. She is an MBA student at MIT Sloan School of Management and co-founder of her own EdTech company, Smile and Learn.
I cannot count the number of times that I’ve heard someone say “No worries, that’s under control,” from the day my dad convinced me that he could build a fire in the forest (and I ended up having the coldest night of my life), to the day my first ever cooked Spanish omelet ended up on my kitchen floor. Some of the sentences that follow that terrifying opening are, “I’ve seen other people doing it many times,” or, “It’s JUST xxx, it can’t be that hard.”
That very typical human tendency to underestimate the complexity of new tasks not only creates fun anecdotes, but actually destroys many potentially great companies.
My experience as an entrepreneur and early-stage investor (I have worked with Founder Collective and Rough Draft Ventures in the last year) has shown me that those mistakes happen (a lot) in the tech world too.
When I founded Smile and Learn more than two years ago with my partner Victor, we went through a few episodes of “no worries, that’s under control.” We started our company with the mission of reinventing reading for 21st century children. Since then, we have pivoted a couple of times and now we have the first smart platform that offers educator-designed mobile apps for children and provides performance feedback to the parent and educator.
We develop our content and the technology so we are a children’s, editorial, and Tech Company. Both my co-founder and I have business backgrounds and had some exposure to tech and media development (but not a lot). When we launched Smile and Learn, we followed the startup playbook and brought a third co-founder and CTO on board. A few months later, that person left the team and we never replaced him because “we have so many important things to do” or “we are just creating gaming apps, it can’t be that hard.” We invested some time in improving the first alphas based on customer feedback but that process took us so much longer than it should have. Don’t get me wrong, it’s not that fast-prototyping, launch and iteration of a product is a waste of time. What is a waste of time is doing so without the right expertise in your team because that means taking the slow route. Time is scarce in any venture but in an early-stage startup, it’s a luxury you can’t afford.
As an investor, I have had the chance to learn that we were not the only ones that commit those mistakes. In fact, I have listened this last year more than a hundred pitches and I would say that at least two out of three teams show some signs of not “knowing what they don’t know.”
But why is that people fail to identify what we don’t know? I have found a few reasons that motivate that behavior. First, we have a natural tendency to underestimate complexity in fields outside of our expertise. It happens to us several times in our lives. When my parents bought me my first bike, I jumped on right away. Thirty seconds later, I was lying on the floor, my eyes full of tears. It looked so easy, it’s just moving your feet on the pedals. But it’s not. The reality is that cycling requires balance and coordination among several moving parts.
The second reason is that some emotions such as fear or pride prevent us from seeking other people’s advice. When you are running your own company, nobody knows more about it than you. You are the real master. However, as with learning to ride a bike, there are many moving parts and you cannot take care of all of them at the same time. Entrepreneurs thus need to get feedback on ideas from people (mentors, customers, and advisors) as soon as possible. For this reason, we bring on board the best advisors or team members who have the expertise our current team lacks
Finally, we all tend to avoid the painful conversations. They are painful for a reason. But having these conversations with your team should happen because you need to come up with a contingency plan: e.g. What if we are not able to create a working prototype? What if we cannot close customers?
For these three reasons, many teams with founders with a pure tech or business background lack the ability to know what they don’t know. Tech teams tend to focus too much on building and business teams tend to focus too much on selling. But the right outcome of this game is a multiplication of both variables: building x selling = success
That is why having a well-rounded team should be the priority of founders and specially CEOs. As an investor, look for those teams. They are rare to find. Also, look for entrepreneurs that have this mindset. People that understand the importance of focusing their efforts in putting together and investing in their more valuable asset: their teams.
The analysis is simple. Identify key knowledge or skill sets that you need to reach product development milestones. Then, match current team skillset against those needs. If you identify some missing areas, evaluate if they are nice-to-have or core for the business.
Stop. Analyze. Evaluate. Keep going. Avoid analysis-paralysis but don’t fool yourself thinking your team is ready to do things it is not. You have to acknowledge what you know (and don’t know). What you can or cannot do.
If you don’t identify these skill gaps, you will suffer the consequences: mistakes take time to repair. Time costs money and conviction. What lies between you and the success of your company is a set of decisions, millions of them. You have a limited number of mistakes that you can afford. Use them wisely!