(I originally wrote this article back in 2000 when I was Entrepreneur in Residence at the Carleton University Tech Venture program)
After you have identified a solid opportunity to bring a new technology solution to market, the most critical factor in your success will be the team you select to launch and develop your start-up (some argue that the team is more important, but I think people come together because of their shared passions).
You will often hear people say that good ideas are cheap, but execution matters. I say that people who can deliver business results from ideas are worth their weight in gold. Click here to continue reading this post…
No matter how great the idea or sophisticated the plan, so much can and will go wrong as you start your company and it will be the experience, skill and character of the team members that decide whether your company can achieve profits and deliver returns to the investors. To increase your chances of success you must build the “A Team” that can deliver. This is much more complex in practice than it sounds, and in my experience, there are many important elements of a great team.
Strong leadership – Perhaps the most important factor in a company’s success is the leader’s ability to effectively motivate the team. The topic of leadership could, in itself, consume a whole article, but it is suffice to say that there are many different types of successful leaders with several common elements. I think highest amongst these is a charismatic personality that appeals to those both inside and outside the company. Such leaders act as an ambassador for the company projecting the appropriate positive image to the market and customers, in particular. Successful leaders are also good at keeping the team focused, are milestone oriented, are positive and constructive, and are able to delegate important tasks to team members and hold them accountable. Above all else, strong leaders exude contagious passion.
Functional experience – The members of a great team have valuable work experience and, across the team, have experience in the different functional areas of running a business. These include sales, finance, marketing, production and research and development and the more you can fill functional roles with people who have experience in these roles, the better. Having personally made numerous unsuccessful hires such as hiring marketing people to conduct sales and product managers to be project managers, I have, over time, learned the hard way that that if you need someone to play a role in a company, you hire a person who has a track record of successfully playing that role, so if you need a sales manager, hire someone who has succeeded at managing sales.
The right structure – First-time entrepreneurs often overlook the importance of an effective management structure and assign everyone big titles such as Chief Technology Officer, Vice President of Marketing and Sales or Chief Operating Officer without giving much thought to contribution of the role to the performance of the company. What is more important than titles given to members is to ensure that each member of the start-up team is accountable for a measurable agenda and compliments the work of his or her peers in moving towards the goals set out in the business plan. In fact, I have seen founding teams avoid titles at the outset so that people can evolve the to role that they best fit. Whichever structure you choose, keeps things simple at the outset, with someone responsible for each of sales, product development and overall leadership, then, over time, as the breadth of work expands, add necessary management roles.
Ability to work as a team – When you launch a company, you will spend enormous amounts of time and energy pulling things together, facing challenges and bringing value to your customers. To be successful, you need to be able to work well together with your team members. This does not mean hiring your friends or people you know will agree to join your start-up, but instead, selecting capable team members who can trust and depend upon each other as well as balance off each other’s weaknesses.
Domain knowledge – Another important aspect of a great team is its strong understanding of the domain, or technology area, in which it is doing business. This encompasses, intimate knowledge of the customers and their problems, the range of technologies required to address these problems, the industry trends, dynamics and influences, contacts, as well as competitors and suppliers. Public recognition as an expert in the appropriate domain, having written articles or made presentations, is also important as this will open doors and help a company build an image of being a market leader.
Start-up experience – When you are creating a business from “scratch” as is the case in a start-up, a lot of experimentation and trial and error learning is required to move forward. At the same time, the markets and business conditions are constantly shifting, so to be successful, you must be able to process enormous amounts of feedback, evolve your assumptions and adapt your strategies. The more practice you have at this, the better you will get which explains why serial entrepreneurs are more likely to succeed at launching new businesses than first time entrepreneurs. In addition, the level of chaos and uncertainty surrounding a start-up can be overwhelming and this kind of atmosphere can be very stressful for people who are not accustomed it or used to working in more established companies. Serial entrepreneurs, are not only conditioned for the pace and demands of a start-up, but they also have a hunger for the associated excitement and highs they can expect to experience.
Diversity with shared culture – While it is critical that the whole team shares passion and desire to work in unison to achieve a common vision, a team without diversity is problematic. Problems and opportunities arise from all sorts of unforeseen angles and a team of clones will tend to see things the same way on different issues. They may miss threats or opportunities or fall into dangerous patterns that can become obstacles to success. Instead try to build a team of people with diverse backgrounds and personalities to help the team debate important issues with the broadest possible set of perspectives. For this exact reason, a representative from a venture investment firm recently remarked at a seminar that he likes to see a team with left and right-brained members. This translates to building a team with people who are creative and abstract thinkers as well as those who are analytical and detailed oriented. Experience from different industries is also an asset if it can provide unique insight into the needs of customers or dynamics in a market.
Finding good people can be a challenge, but if you know what you are looking for, it becomes a lot easier. Once you have identified the elements of the team you need, you can call upon your network, advisors, customers, and suppliers to help you find good people. You can develop marketing plans that are sensitive to your team building needs and you can seize hiring opportunities when they arise. Building a team with all these attributes may seem virtually impossible and very few companies are able to claim they meet all of these criteria, however you must constantly strive towards excellence in all areas if you want to be a successful entrepreneur and high on your list of priorities should be building the team that can deliver the results you want.