Have We Bought Into A Fallacy Of Individualism In Startup Culture?
One of the unknowable things my partners and I spend time trying to know is: What is the right composition of a startup founding team?
Quixotic though that may sound, it’s impossible to ignore the question when you are launching and growing early-stage companies. After all, a business at inception is often little more than a person or people with an idea. The idea and market may determine success, but the person or people responsible for executing are at least as likely to do so. Many mediocre business ideas have been turned into fat stacks by determined founders who communicate well, while great ideas frequently founder on the rocks of human frailty.
The issue of whether to go it alone, or work with a partner or partners, is interesting given our cultural context. In America, we idolize individuals and individualism and rarely celebrate cooperation or community. We focus on personalities not issues in politics; we build up and knock down celebrities as a national hobby; even the way we teach our children about how we got to where we are today focuses on the individual. Momentous events necessarily involve millions of people, yet when we re-tell our history, we often do so as if one person was solely responsible for entire national, cultural or economic revolutions. Independence, George Washington; evolution, Darwin; the steam engine, James Watt.
Of course, we have reason to believe that these individuals played a significant role, but if we think harder about their situations — and acknowledge the universal truth that we depend in numerous ways on others for our happiness and success — we know they didn’t act alone.
The same thing happens when we tell the story of businesses. We talk and write about entities composed of hundreds of thousands of people, labyrinthine systems and nation-sized economies, as if they are entirely the product of one founder’s effort. Apple, Jobs; Amazon, Bezos; Facebook, Zuckerberg; Tesla, Musk. Our collective capitulation to this founder-pedestal syndrome is such that our default setting is to imagine that starting a business is a solo endeavor.
Yet the data suggests we are better in teams. The analysis of thousands of startups by Startup Genome found that solo founders take 3.6x as long to escape the startup phase, and that a balanced team with ‘hustlers’ and ‘hackers’ (business and tech folks) has 2.9x more user growth than an unbalanced team. The same analysis also found that adding a second person to a founding team increases average growth rates by 3x and decreases the chance of scaling too soon by 19%.
These statistics are directionally useful in thinking about forming a founding team. They ring true too. After all, how many leaders have all the skills to succeed? Even a dynamic duo will have gaps. Recently we’ve been talking to a startup where the founders are a brilliant data scientist with exit experience, and an accomplished and business savvy medical professional. Both have leadership ability in spades, deep knowledge of their market, and connections to capital and customers. Still, they recognize that additional founding-team firepower in the areas of finance, ops, marketing and technology could be beneficial.
Mark Suster, managing partner at Upfront Ventures, who has a lot of great advice on the composition of founding teams, sums it up thusly: “Individuals don’t build great companies, teams do.”
Suster’s thought works for us in part because it isn’t prescriptive. It doesn’t say: ‘founding teams should be 3 people; one should be a carrot, one a tawny owl, and one a xylophone.’ Prescriptions for these things don’t work because businesses cannot be mass produced. They are idiosyncratic, specific, existing in a certain space and time, inhabited by certain humans with unique characteristics.
We also like the Suster quote because, the way we read it, it’s attitudinal. It says ‘in the end, greatness is going to require collective endeavor,’ and that is surely the rub.
So, perhaps the answer to the unanswerable question we’ve been wrestling with, is that the right founding team is not about a number of people, or areas of expertise, but about the ability of the founders to work with others. Can they distinguish between imposing their ego and their vision of what’s right? Do they listen to and learn from others (customers, investors, advisors as well as each other)? Do they, ultimately, understand how to build, empower and support a team, being the lynchpin in the flywheel when needed, and getting out of the way when they’re not?
Yes, these are soft metrics not integers, but we have started to think that a founders’ ability to understand other people and harness their talent may just be the best predictor of success.
Some may counter this argument by invoking arguably the most successful founder of all time, Steve Jobs, often characterized as an egocentric, dictatorial, lone wolf. Yet Jobs understood that it was about the collective. Jobs biographer, Walter Isaacson, once asked him what he considered his greatest creation, thinking he would say the Mac or iPad. Jobs said it was Apple the company. “Making an enduring company,” he told Isaacson, “was both far harder and more important than making a great product.”
Which makes sense. Jobs didn’t act alone. He was surrounded by a loyal cadre of folks who were inspired by him and loved working with him. Jony Ive is a great example, a man who was less lieutenant and more Jobs’ design soul-mate, taking his leaders’ design-ethos and bringing it to life in ways that only a trained designer can. Lee Clow was instrumental too, because he gave Jobs’ vision a voice we related to and a backbeat that made us dance. And, lest we forget, there was a guy called Steve Wozniak who was the primary hardware thinker behind Apple’s first products. So, even Steve Jobs — exhibit A in the pantheon of individualist entrepreneurs who we idolize as if they wrought companies with their bare hands — had partners.
Do we know how many founders a business should have, or what exactly their skills should be? Of course not. Nor does anyone else. But we’re starting to suspect that’s not the right question. Instead, we think we should be asking: Are these people committed to the idea of team?
Truth & Systems is a start-up studio based in NYC’s Meatpacking district. We create, co-found, invest in, and scale companies. We are interested in ideas that make jobs rather than take jobs, help rather than harm the environment, and promote inclusivity not divisiveness.
Check us out at truthandsystems.com.
