For the team to win, it needs first and foremost to be the right team. In this article we will talk about one of the biggest challenges entrepreneurs face already at the beginning of their journey – creating this team.
People build companies, and people are the ones who bring companies down.
According to a recent study with 101 failed startups, the third most important reason for business failure was “Not the right team.” That’s why it’s not surprising that investors want first and foremost to believe in the early-stage team and its skills before they even look at the idea of the SU.
A little more data:
65% of SUs fail to grow or raise funds because of unhealthy relationships between team members.
Entrepreneurs assign 20% importance to the team in the SU success, while investors believe the team's importance to be over 90%.
The DNA of the company is a crucial factor in its success, and the biggest challenge faced by founder-entrepreneurs is building it right.
I see 4 Basic Stages in Creating a Primary Team for your Startup:
1. Mapping the necessary skills required on the professional level and complementary skills
2. Determining the right personality traits for founding partners and an initial team
3. Examining similarities in values between the founders and also between the founders and the initial team
4. Developing the right management skills adequate for this stage, like team building and role modeling
So, let's dive in to each stage:
1. Complementary Professional skills:
Choose employees with complementary skills who can perform the job in the long run.
When you choose the founding team for your startup, you actually lay the foundations for your company.
In more advanced stages, a technology company is usually made up of several permanent departments: software development, marketing and sales, customer service, information systems and technical support, finance, operations and human resources….
However, in the beginning usually you won’t have the financial and human resources to fill all positions. Therefore, you need to choose a balanced team where everyone can “wear multiple hats” to allow the business to work and grow.
A good initial team will include between two to three people, I recommend three.
To decide what skills needed let's take a look both from the outside and the inside point of view:
As far as outside investors, they want to see a quality team with complementary qualifications.
The chance of an individual entrepreneur raising money and implementing their plan is very low, both statistically and in terms of the actual chance of implementing the business plan alone. The optimal situation for a startup is two or three entrepreneurs, with at least one of the entrepreneurs having a technical background relevant to be the CTO product development and the other having relevant business experience to be the CEO.
From Internally point of view, to set up a startup you need someone who knows how to define the task, understand what the need is and who need it is, and someone else who knows how to solve the problem and satisfy the need inhouse.
I therefore recommend in most cases to set up a startup of 3 founders:
1. CEO businessman/woman (Business Development): At the early stage, the CEO acts as the foreign minister Infront of the investors, creates the network of contacts in the relevant ecosystem and can best understand who the potential customers are and what problem the future product solves for them. I Meet too many CEO's who are unable to reach to their main tasks of foreign minister and network creator as CEO and there for not totally understand the potential customers and their problem, since they are already deeply hands on function as the product manager and the marketing manager.
2. CTO Technologist (Engineer): has relevant technical background to solve customers’ problem through product development, feasibility study, POV, whether it can be built in practice and at what price.
3. If possible, I would recommend to add a third founder as the CPO Product Manager or as the CMO, depends on the business needs. CPO will be able to defines a vision and product strategy and translates it into a roadmap and finally to characteristics developed by the R&D. CMO will be able to execute the marketing plan.
Beyond the professional neesh of each of the founding team, you must also consider the range of their personality traits. I would like to recommend two features that I think you cannot do without:
A. Build a team with a passion for your idea and for innovation as a mindset
Steve Jobs, Apple's founder said: People with a passion can change the world for the better.”
He also said that after finding and adding the first ten right people to the team - they would come together and decide who is allowed to join next, and who isn’t. That's why is so important to make this effort at the early stage of your startup.
In my personal experience, passion does indeed neutralize mediocrity. From my work in high-tech companies, I have learned that in every workplace there are "minimum people" and "maximum people". That is, there are people who will always do the minimum required of them, when they approach each task with the thought of "how am I going to finish this as soon as possible" and will not even hesitate to place the responsibility on others. In contrast, there are people who always approach the task in order to give added value and do the maximum they can to produce something of quality.
The inner fundamental difference between the two, is that the minimum people are driven out of necessity ("I’m doing this because I have no choice"), while the maximum people are driven by passion ("I’m doing this to achieve a sense of self-realization and significance").
Of course, this variable depending on the person’s personality and the task they are required to perform. Therefore, if your idea and purpose do not ignite the imagination and passion of the person sitting in front of you in a job interview - just don’t employ them. They won’t be committed to the job the way you are and won’t enjoy it - and that is a recipe for mediocrity. This is because by actually accepting that person for a job that they are not enthusiastic about, you encourage them in advance to settle and become a ‘minimum person’ who demands less of him/herself – consequently giving less of him/herself, because his satisfaction batteries are empty. It’s simple math.
And the personal passions of employees have far-reaching consequences, in part because passion arouses curiosity to know more.
If your initial team and employees are updated daily with the latest innovations in the world of technology and inspired by diverse worlds of knowledge (books, movies, blogs, art, conferences, social media…), they will enrich each other and your organization’s level of creativity. They will learn for themselves out of personal interest in the market in which you are competing, come up with original ideas and try to base them on data from the field, instead of opinions and wishful thinking - and this is the way to build a stable and profitable business.
So, on the personal level we talked about passion, curiosity and innovation. My second recommendation on the personal traits is to:
B. Choose people who can be trusted and grow as a group and not just individually.
I about to share with you some insights that also been raised by Simon Sinek.
As part of my role as the director of behavioral sciences at the Israeli Mars Analog center; D-Mars, we have future astronauts and researchers coming from all over the world to take part in our simulations and I'm in charge for the analog astronaut's selection and their team building. I keep getting questions on how do we pick the best ones? Well, we should refer to tow aspects: performance and trust. Performance is basically how do I perform up stage in real time thanks to my skills and experience. trust is how do I behave backstage, what kind of a person am I related to my abilities to motivate and influence others.
So we can spilt it to four types:
Low performer with low trust- nobody wants him- off course
High performer with high trust- everybody wants him- off course
What I've learned from my diverse experience as an HR and as a manager is that the high performer with low trust can become a toxic leader and a toxic team member.
When I talk to mission commanders of analog missions and military commanders, they say with no doubt in their mind that they would rather have a medium performer with high trust over a high performer with low trust.
But when I talk to managers at the industry, it's the opposite and that's the problem we have in business today; we have millions of ways to measure performance and almost no ways to measure trustworthiness.
So we end up promoting and bonusing toxicity in our business which is bad for long game and destroys the company from within.
The irony is that its unbelievably easy to find this people. Go to any team and ask: Who's the asshole? -they will all point to the same person.
Equally, if you go to any team asking: who do you trust more than anybody else? Who's always got your back and in case all will go wrong, they will be there with you? - they will also point to the same person, it's the best gifted natural leader who's creating an environment for everyone to succeed and they may not your most individual highest performer. But that person- you better keep them in your team!
Beyond the complementary skills and personality traits, it’s Important to have similarities in the values that lead the primary team of a startup. This will help you understand what is important to you and manage expectations with the other founders and the primary staff. There are many things worth finding out before connecting just based on common values. It will save you a lot of pain and strengthen trust, healthy communication and a better ability to deal with criticism and conflicts.
4. Management Skills: Team building and role modeling
congratulations!!!- You have your initial team now!
But how to manage an early-stage startup team? The answer is Team building and role modeling.
The biggest capital of your startup is not the idea behind it, neither the technology nor the funds you have already managed to raise, but your human capital.
There are lots of theories but what they all have in common is that there are stages that every team goes through, the transition is part of the team development as a person develops from baby, child, adolescent and adult.
According to the most significant model by Tuckman; The team's manager must adapt the management style to the team development stage in order to transfer it from being an immature team to a mature and effective team.
Effective leaders know, you’re only as good as the people you’ve chosen. Great leaders know that developing their team is an essential part of their role.
Team development is easy, in theory.
Leaders who are capable of building and developing effective teams have a huge advantage over others. When done properly, team development can create an innovative atmosphere that encourages cooperation, teamwork and trust.
But as most leaders know, team development doesn’t just happen; there’s a lot that goes into turning a group of people into a productive team.
At its core, team building is a process of transitioning individuals into a united group. A group that works interdependently and cooperatively to accomplish a specific set of purposes and goals.
When applied in real-world contexts, team development can get tricky.
It's very important to build a team with the right and complementary skills, to choose people with passion for your idea and curiosity for innovation. to find individuals who can promote others than themselves and positively influence their environment and to generate an initial team led by common values as their founders.
However, all we talked about so far will not work unless you will generate the glue which will connect everyone. This glue is your vision and mission statements and your ability to make everyone feel it's their own vision and mission as well and that you all make a group effort in order to get there.
In a general sense, we can regularly witness effective team development in the sporting arena and in the human space missions as well. The most successful teams or space crews are driven by motivation to work in unison to achieve a shared goal – The most successful teams are those that connect, communicate, and collaborate towards achieving a singular goal. It’s the role of effective leaders to know how to develop these individual strengths and direct them to realize their potential results.
I'm sure you are all familiar with the phrase: be the change you wish to see in the world. so, I would like to encourage you to be the change you want to see in your startup.
Do what you demand: if you want partners and loyal employees along the way, who are full of passion, curiosity, work diligently highly professionals who will lift each other up – than, you as the company’s founder should serve as an example of this culture and be the flagship of this behavior.
Dr. Emily Anhalt said there are six qualities that make an entrepreneur-founder “emotionally ready” for entrepreneurship and they are: self-awareness, empathy, willingness to play, listening, resilience and effective communication.
On your way to establishing a team, you should make sure you have the emotional and professional tools to be the leader YOU would like to work for.
the path to success depends first and foremost on who you are as people and on the decisions that you make as the leaders of the company. Because when you bring new employees into the organization, you not only bring in their skills, but also their habits, worldviews, and the nature of their conduct in the team, so that the entire work environment is shaped by the foundations you lay.
Therefore, if you want a successful business - think far ahead, know where you want to go and who you want to be there by your side.