3 keys to building the perfect startup team
Ask any successful entrepreneur about developing a succesful business model, and he’ll probably be able to draw one for you in less than 5 minutes with nothing more than a few post-it notes, a napkin and a sharpie (whilst balancing on a unicycle and watching a YouTube motivational video by Tony Robbins).
That part is easy. However, ask him about putting together the perfect team for a startup, and he’ll probably give you a vague reply saying something on lines of putting together a team with the right skills, a go-getter attitude and a growth mindset. I can’t disagree with this, but what does this really mean? Over the past decade of working with entrepreneurs, I’ve learned that building the perfect (founding) team is still biggest issue founders face in any startup.
When typical investor groups evaluate a start-up proposal, they report about 25% of the final decision is based on the team. That’s pretty high. But over the past few years of listening to start-up pitches, over 50% of my decision has been based on the people. Why? Because I know from experience that having a great product with a mediocre team can only get you so far. But a poor initial product with a world-class team can make you the next unicorn. So it is fair to state that the success of a startup is heavily dependant on having right people involved at the right time.
Why is the founding team so important?
Success in the early stages depends on the founding members, the work they put in and the vision they have for the company. So, how do entrepreneurs go about forming a start-up team that gives them the best chance of success? According to Saul Klein, entrepreneur and founding partner of TAG, Skype and LoveFilm, among others, the perfect start-up team consists of a technically minded developer, a creatively conscious designer and a sales-driven distributor. We can translate this into three types of roles which are the most important to fill:
1. The Developer, a technical wizard who can create anything that the team can dream and lead the product development. The developer knows how to create and build a system that allows the business to operate, and to solve future problems. They are also responsible for the feasibility of the product: if it can realistically be built, the methods to build it, and the resources and costs to do so.
2. The Designer is in touch with what people want from the business, and what the business can do for users. They can react to this demand, and shape the experience appropriately. They need to understand human behaviour, be creative and understand how design affects user experience.
3. The Business person is responsible for the viability of the business model, and knows how to market the product to its intended audience. They understand sales, marketing, business development and are experts in developing and influencing relationships with potential customers, investors and partners.
This is an opinion Reid Hoffman, co-founder of LinkedIn, expands on: “The classic play for the garage in Silicon Valley is two to four co-founders. At least half of them are massively good technical [sic]. At least one of them is good with his eye. And at least one of them is the good generalist who would grow to become the effective director or CEO in terms of putting everything together.”
Of course, most start-ups aren’t immediately going to have a team containing all this specialist know-how. Your business may have a skilful developer, full of ideas and with experience in CSS, Ruby, PHP and the many other programming languages, but you’ll inevitably lack creative direction or someone who knows how to sell to people, and vice versa. So what should entrepreneurs do in this situation? Play to their strengths? Focus on one area and worry about the others later?
Klein believes that the answer lies with balance. He suggests that two founders sharing the three skills is a more realistic prospect for most start-ups. Balancing these skills is vital to the long-term prospects of the business; an over-reliance on the creative and design aspects and the business could be the best brand in the world, but it would neglect the needs of the consumer and struggle to convert. Even large companies have been affected — Klein cites Microsoft’s stellar distribution and development costing it around $50bn, due to Apple’s perceived sleeker and user-friendlier design.
Obviously, the likes of Steve Jobs, who fulfilled all of above skills, come along once in a blue moon, but in an average start-up team, there will be some crossover between the skills possessed by founding members. The task for entrepreneurs is to harness these skills and use them to further the potential of their business; smart entrepreneurs will neglect one of these at their peril.
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