Building a winning startup team
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Ask any experienced entrepreneur or investor ‘what makes a successful startup?’ and they will frequently answer ‘a great team’. The right people – and the relationships between them – will make or break a startup. A significant percentage of startups fail due to not having a properly constructed team.
“VCs want to know who’s driving the bus. The management team’s capabilities are by far the most important consideration, and even more so when it comes to first-time founders. Do you have the grit and expertise to win? The drive and passion to keep going when you inevitably face obstacles? Good judgement to seek out help? ”
So how do you build a great startup team with the grit and expertise to win?
It all starts with you
The first step is to honestly assess your own skill set and how this could contribute to a successful startup team and the needs of the specific business who are planning to start.
There are a bunch of online self assessment tools that can help you understand your own skills profile.
A startup team needs the right mix of skills to move the business forward. In their excellent book, the Beermat Entrepreneur, Mike Southon and Chris West highlighted five core roles for startups:
Lead entrepreneur – ability to drive the business forward, communicate the vision, motivate the team
Technical innovator – ability to develop the product to respond to market and business needs
Sales and marketing – ability to focus on customers, promote the business and win sales for the business
Finance – manage the budgets and cash flow, help raise investment
Operations – maximising the efficiency of the organisation and its administration and processes
These roles may be played by several individuals but could also be covered by just two or three people with complementary skills and a few well-chosen peers, advisors or mentors. Very few founders or teams will have all the necessary skills at the outset but the best will learn on the job and progressively add key people when needed.
Another perspective is for the startup team to include three key roles - a Visionary, a Hustler and a Hacker. The Visionary keeps the future in mind and is able to communicate that to others. The Hustler helps to make things happen and the Hacker is the brains of the team who lives and breathes the product.
“No matter how brilliant your mind or strategy, if you’re playing a solo game, you’ll always lose out to a team”
There is no magic number of team members for a great startup team – though some suggest two or three people are ideal. Starting a business is tough for anyone and solo founders can have an even more difficult time if they have no one to bounce ideas off. However, there’s no definitive answer and it is whatever works for you and your business.
Startup founders need to honestly assess their own skill set, play to their strengths and balance out the areas where they are not so strong with other core team members, advisors or some focused learning and development.
As noted, venture capital investors will place great importance in the team. According to Baz Banai, a Melbourne based private equity lawyer, they will be looking for ability, industry experience and passion as the most important qualities in a management team. The startup team needs to demonstrate these qualities and abilities and make sure they are covered in the pitch deck.
Mindset > skillset
In starting a business, mindset is even more important than skillset. An entrepreneurial mindset is a set of beliefs, thought processes, and ways of viewing the world that drives entrepreneurial behaviour. Entrepreneurs believe in their ability to learn, grow, adapt, and succeed. A positive growth mindset is critical. Startup founders need to be comfortable with uncertainty, regard failure as an opportunity to grow, believe they can learn to do anything and that effort and attitude determine their abilities and outcomes.
Tenacity is just as important as talent. Tenacity is about determination and persistence and can mean the difference between success and failure. Founders need determination to stick to their purpose. Tenacity is the quality that drives founders to pursue their goal and follow it through, all the way to its completion.
Core team
‘Nobody’s perfect – but a team can be.’ Dr Meredith Belbin
Having taken an honest look at yourself and the skills you have and do not have, the next step is to find one or two other people with complementary skills to join you. It is very important to focus on the needs of your specific startup business - what skills, networks, experience etc. will help this business succeed? What are the gaps you need to fill? What industry experience do you have? This will help you to build your startup team.
Some suggestions to help you to find the right people include:
Start with a clear view of what skills, experience, and networks your business needs and what culture and attitudes you want
Spread the word through your network
Think about people who you already know: people from university, current and former workmates and associates
Build your network through attending relevant startup or tech events, check out co-working spaces, Meetups or online groups
Speak with key people at network hubs e.g. Industry Associations, Business Advisors, Incubator, Accelerator and Co-working Space Directors etc.
Once you spot potential members of your core startup team, issues to consider include:
The beer test – would you enjoy sitting down for a beer - or a coffee etc - with this person? Would you enjoy working with them?
Fit with the skills, experience and networks the business needs
Attitude, passion, motivation and fit with business vision and culture
Financial position – are they able to invest or at least feed themselves whilst the business gets started?
Ability to get things done in a startup environment rather than a big company environment, some people cannot make the transition.
Think very carefully before going into business with friends or family, it can complicate things and consider what would happen to the relationships if the business goes wrong; think first about what skills are needed for the business.
It pays to conduct some due diligence to check the person out – go through their CV and history and conduct a thorough online search – at the end of the day do you really trust this person? If you have a gut feeling that something is not quite right with a potential team member then trust your gut and move on - you will often find that gut feeling turns out to be correct a year or two down the line, costing you a lot of time, money and lost opportunities.
Also consider timing, you might know some great people but it might be best for them to stay in their day jobs, save some cash, moonlight on the startup and jump ship once a key milestone is achieved or until they just need to be full time and full on in the startup.
So to build a great startup team with the right people to work with, keep learning and enjoy the startup business journey.