As I mentioned in my last post, once you have developed an execution plan, it is now possible to build out your team to make the plan a reality. Before I get to this point, though, let me mention a few things about startup teams.
Most startups begin with a visionary team — in essence a group of people who see an opportunity or product that most other people cannot see. For the startup to survive its early stages these people must often be very passionate about their company and/or product vision. If they are not passionate then they are often not willing to make the necessary sacrifices in time, money, and ‘pain’ that it takes to ‘birth’ this new enterprise.
The high failure rate for high-tech startup companies can often be attributed to insufficient passion among the founding team to see the company through its early, difficult phases. This is one reason that sophisticated investors often look for ‘strong passion’ and serious ‘sweat equity’ (unpaid time with long hours) among the founding team before they choose to invest in early-stage startups. They know from experience that without the ‘passion’ element the team or company may self-destruct before the company ever gains traction.
So, without getting sidetracked too far, what types of difficult problems do founding teams often face that may lead them to abandon their enterprise? Here is a sample list, far from exhaustive, but it should give you a feel for what needs to be overcome and survived:
- unpaid 12-18 hour days, with no weekends, holidays or breaks, ever (at least for a few years)
- few ‘believers’ and many people that think you are crazy and destined to fail or at least waste a lot of time
- some interested customers who never seem to get around to actually purchasing or trying your product, but like to ask you to build things for free
- learning all kinds of things that you never even knew existed and may not be interested in (ie contract law, other computer languages, marketing theory, team management, stock option agreements, etc.)
- the need to mortgage assets, take out loans, reduce your expenses, stop pursuing other hobbies, spend less time with family and friends, etc.
All these types of ‘obstacles’ are balanced against a team’s passion and willingness to go on and push things forward. Additionally, it is this passion, that can attract others to become part of the team and join the ‘quest’ to overcome these obstacles in pursuit of a dream and/or financial reward.
A founding team’s passion is often it’s strength, one of its weaknesses is often that it is too small or inexperienced to take on the execution challenge. So for example, the team may consist only of business people who do not how to develop a software or hardware product or, more commonly, mostly technical engineers that don’t really understand the nature of business and do not know or really care to run a business. Even balanced teams that contain both business and technical people may have insufficient experience or contacts to strongly execute on the company’s plan.
As a result, the founding team will often need to complement its abilities with more knowledgeable and experienced business and technical people as the business matures. In order to do this, founding teams often leverage their passion and their execution plan to excite others about the financial and experiential potential of their venture. It is important though, that the team focus on hiring the ‘right’ people and not just try to hire any experienced talent that they may find.
Some key pointers in hiring appropriate people is to target at least one person for each functional area of your execution plan (ie marketing, sales, business development, etc.). Also, you should focus on people that have the following profile:
- Must have some startup experience (the more the better)
- Domain expertise and/or recent industry contacts are critical
- Willingness to roll up their sleeves and work hard
- Willingness to accept fair compensation and few perks
- Track record of strong, direct business performance and good network
- Strong ethical character with minimal interest in office politics
- Should show passion and excitement about your space/product
- Should be able to ask you good questions that you may not be able to answer
- Good references (at least 3)
The purpose of this checklist is basically to help you find some people who can provide you with value and who hopefully won’t end up taking advantage of you. Once you find these people, the challenge then becomes to excite and interest them enough so that they join your business. This again is often done with a combination of passion and the foregoing business analysis showing that your business has a great financial opportunity.
So now with the team in place for your execution plan, you are in a position to start making an impact on the marketplace and acquiring customers. In my next few posts, I’ll discuss customer acquisition in more detail starting with your marketing messaging and positioning.
Until next time, have a great day!