5 Steps to a Winning Founding Team for your Startup
One of the biggest competencies for an entrepreneur to have is the ability to surround himself or herself with the right mix of people and skills to take a startup from garage to growth. In fact, there are some interesting facts related to the founding team of a company:
- 62% of all startups fail due to co-founder conflict (source: fundersandfounders.com)
- The majority (40%) of all new business startups in 2012 had two founding members (source: Mashable)
- Most “unicorn” companies ($1 billion or more valuation) had experienced co-founders in their thirties with a prior history together (source: TechCrunch)
What these statistics show is the importance of building a solid team for your startup. But how do you get started? Here are 5 easy steps to begin assembling a winning team:
1) Admit that you may not be the right person for a certain role
Hi, I’m [insert name]. I’m the founder of [insert company name], and I should no longer be CEO...The first step is admitting you have a problem, right? This is one of the hardest confessions for an entrepreneur because, up until now, you have been the one in charge, making the business decisions, developing the idea. But there may come a time when it no longer makes sense to run the company. As needs change and growth occurs, it may necessitate leadership expansion. Reid Hoffman, co-founder of LinkedIn, cites the moment he knew a transition was needed: “[The] CEO increasingly [had] to focus on process and organization, and that wasn’t what I was passionate about...I’d rather be solving intellectual challenges and figuring out key strategies, not debating which employees should get a promotion, or configuring project timelines.”
2) Identify the skill sets needed to grow the business
Jenn Houser notes that you should identify 3 to 5 of the most important business operations and synthesize the appropriate skills needed to successfully accomplish your objectives in those areas. These should be complementary skill sets, with technical and business / operational expertise being the most commonly cited needs for an early-stage growth company. That said, you also need to evaluate appropriate behavioral and leadership characteristics that correlate with your company values. Bernd Schoner believes the right attitude is more important than skills because it gets to the heart of successful and long-lasting founder relationships.
3) Find the right people to fill your business gaps
Now that you have curated a list of skills and qualities in potential team members, you need to go out and find them. There exist numerous outlets for sourcing co-founders or company management: you can look at business incubator or accelerator programs; you can tap your existing network of business contacts and/or leverage their extended networks; matchmaking organizations such as CoFoundersLab or Startup Weekend are also available for startups. Identifying a pipeline of candidates should be the easy part, but the key thing to remember is aligning your business objectives and values with the individuals you are evaluating.
You must also give it time. As outlined above, startups rely heavily on a good team and can fail due to in-fighting among founders. You have to develop strategies for training and evaluation to ensure that the person you chose is the right fit for your startup. You also need to gauge your overall relationship with them - even if you were acquainted previously, adding a formal business arrangement may alter the tone and character of your subsequent interactions. All of these factors must be assessed in the “onboarding” stage of a new team member.
4) Supplement your founding team with an advisory board
No entrepreneur has the vast wealth of knowledge and skills in their canon to start, lead and grow a company all by his or her lonesome. Moreover, most startups do not have the funds to hire every position they may need. As a result, cultivating an advisory board or high-level mentor group can supplement any gaps within a startup. It can function as validation for the overall strategic direction as well as fulfill specific niche needs such as legal or marketing advisement. These individuals are typically industry veterans with an established professional record who are looking to give their time and expertise to grow young companies. As these are typically pro-bono arrangements, it is imperative to outline the expectations of the group as well as the value proposition you offer in exchange for their service and expertise (Adam Toren, entrepreneur.com). Keep in mind: your advisory board could be a great source for filling an executive position in the future, so select wisely in the beginning and keep them engaged and excited about your business during their tenure.
5) Let your people lead
This last step is incredibly important and also very difficult to accomplish. Once you have selected the right team at the right time in the development of your company, you simply need to let those people lead. If you hired a new CEO, let him or her run the business and refine the model; if it is a technical executive, give them the space to develop the product or solution. You brought them on as part of your founding team, so allow them to flex their muscle and expertise to advance and grow the business. That does not mean you lose complete touch with what is going on in other areas of the company - sound communication is crucial to any team after all - but you are no longer involving yourself in the day-to-day aspects of that position. Embrace your new role and bring your specialized skills to help position your startup for sustainable growth in the marketplace.
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