Team is such an important thing in the startup world. A study says that 60% of startup failure is due to problems with team. Bill Gross, the founder of Idealab, also found that team is the second most important thing for startup success, after timing.
So if team is such an important thing in the startup, why do so many startups get it wrong when it comes to team-building? Or, let’s ask a better question, If team is such an important part of why startups succeed, how do you, The Strategic Founder, ensure you get your team-building right in order to succeed and avoid the unnecessary bumps faced by most startups that get their team-building wrong (and hence, their startups)?
The answer is that you need to learn team-building. You need to learn how to find the right people for your startup, organize them into a stellar team, and build a successful startup.
Here are a few ideas about building teams the right way.
1. Don’t be a single founder.
Starting a startup is hard, and making a startup succeed is harder. As Ben Horowitz noted in The Hard Thing About Things, the startup world is a strange place to be and you can rarely survive alone, without a team.
You can’t do everything, and even if you can, you shouldn’t. In a startup, you want efficiency, effectiveness, and productivity — and the only way to achieve those, to reasonable scales, for an early-stage company is by having founders with complementary skill sets. One person may be best at a technical skill. Another may be on the business side (sales and marketing) of the startup. Another on dealing with the government, regulators, and the like. Ideally, every startup should have 3 founders.
Apart from the complementary skill sets the founders should have, it helps that you have two co-founders so that when one founder falls, the others would raise him up. Having three founders also helps especially when one founder exits the company, as it sometimes happens.
2. Get early employees with complementary skill sets.
In addition to the founders, all your early employees should have complementary skill sets. This will help you get more efficient, more effective, and more productive.
3. Find people with integrity, energy, and intelligence.
Everybody on your team must have the 3 qualities, with integrity trumping them all. If a team member has intelligence and energy without integrity, all you have is a hardworking crook. If a team member has energy and integrity without intelligence, the team’s progress will be stalled –and startup success may elude you. If a team member has integrity and intelligence, but no energy, all you have got is an indolent fellow who retards your speed and demoralizes the team.
In a startup, you are in a race against time, against resources, and against your competitors. And if you have a key team member who doesn’t pull his weight, no matter how smart and honest he seems, you won’t go far in your company-building with him. Integrity, energy, and intelligence are what you should be looking for in every team member or potential ones.
4. Everybody in the team must believe in what your startup is building –the startup’s vision.
This is where energy comes from. You don’t need a cynic or skeptic in your startup. You don’t need people who are lukewarm and lethargic. You don’t need people who are indifferent and apathetic. You need people who are irrationally passionate about what you are doing. You need people who believe in the cause excessively. You need people who are committed and are in it for the long haul. You need people who are there beyond the money or immediate benefits. You need people who see what you are doing with a sense of mission and service; people who are pursuing things higher than themselves. Those are the kinds of people who build great companies; those are the kinds of people who change the world; those are the kinds of people you need in your team since you want to change the world through your startup.
5. There must be a sense of brotherhood.
When people belong to a cult, they act with a sense of brotherhood. A startup is like a cult, but in this case, you are fanatically right about some important (whereas cults are usually fanatically wrong about something important). Peter Thiel expressed it better: “The best startups might be considered slightly less extreme kinds of cults. The biggest difference is that cults tend to be fanatically wrong about something important. People at a successful startup are fanatically right about something those outside it have missed.”
When your relationships are so closely-knit together that you are exhibiting a sense of brotherhood, you can go at any length to help each other in accomplishing the company’s mission. You must go beyond just being ‘professionals’ to ‘brethren.’
6. Early on, more rewards should be based on equity and stock options rather than money.
This helps to both keep the company running at a low cost and to motivate the team since each team member’s success is tied to the success of the startup. And only equity can ensure that. If the company fails everybody losses, and if the company succeeds everybody wins. This pushes everybody to commit and to do their best. Of course, there still has to be a monetary compensational arrangement for the basic needs of your team members.
7. In the early stage, hire only those you have known for long.
You couldn’t get married today to someone you met yesterday. Both of you will usually have to take the time to study each other and understand yourselves. Startups are not any different from marital relationships. If you are starting a startup, find people you have known for long and whom you can go along with.
You should be going for people with complementary skill sets to yours, and especially, those with strong character, integrity, energy, and intelligence – as you must have observed in your relationships with them over time. Don’t pick your friends to join your company because you don’t want them to feel left out. If you can’t get along with people, don’t let them in into your company, even if they are good people naturally. You wouldn’t marry someone you couldn’t get along with, even if they are good people naturally. You may not even know why you don’t like them, but that is not the point — the point is that you don’t like them and that is enough for you to keep them away.
Decisions about marriage can be more emotional than they are logical; so can be your relationships with your early team members. Be subjective in your choice, if that helps you get the best people you know you can work with.
8. Anybody on your team must have a specific, important reason for being there.
You must know why each person is joining your company. Don’t just increase the number – because you want to impress the press people or your investors. Apart from increasing the cost of running the company, increasing the size of the team derails the company building by accelerating the bureaucratic nature of your nascent and fledgling startup that requires all the speed there is to succeed.
In the early stage, hire for only two reasons: (a.) Those who build the product (b.) And those who get out of the building to get users. In other words, hire only for product development and marketing.
9. Every team member should have their roles clearly defined, but the job of building the company should be the overriding objective.
When everybody’s role is defined, it increases efficiency and productivity and reduces confusion. Having clearly defined roles also makes people play less of office politics — which helps them build relationships with each other beyond professionalism.
But even more than escaping the risks of office politics and confusion, having the startup succeed should be the paramount thing in everybody’s mind. So, there is nothing wrong with having a team member help another in their quest to getting a particular job done. What should be avoided in this case, however, is job slip. That is, it should be made clear what is being done – that nobody is slipping on another’s role, but only necessary assistance is being rendered — and the appropriate notice made to the appropriate people, especially the bosses of the team members in question. For instance, before a team member could go to help another team member in a job that would take a reasonable amount of time, say, one hour, there must be express permission from the bosses of the team members and alignment with everybody involved.
10. Every team member should be working at the company full-time.
If you want to build a visionary business, you don’t do that by letting outside consultants or part-time workers do your job for you. For the merit of it, to build the brotherhood kind of relationship required for startup success, closeness, and alignment are the greatest ingredients. And you don’t achieve powerful closeness and alignment by having people who drop in the company’s office and leave later to do other things that don’t relate to the company.
You need people who are totally committed to the company with their time. Of course, there may be a strong enough need to override this, leading to you getting outside talents. But you must be careful because you treading on dangerous ground.
(More on that here.)