We often read about the qualities for making a good CEO, a great founder, and more importantly how to successfully lead a team; but we often disregard the importance for startups to have a good founding team.
Early-stage investors always look for teams that have complimentary skill-sets and communicate well with each other. They invest in enthusiastic teams that have a blend of corporate and start-up experience which disciplines and challenges one another think outside the box at the same time. They look for passion, determination, curiosity, hunger, flexibility, efficiency and more importantly, mutual respect between the founders. We have all witnessed fallouts of founding teams that have cost startups millions of dollars due to conflicts that primarily arise from founders not getting along.
Especially at the start of the journey, you’ll find yourself spending 12-16 hours a day with the same group of people and will come across a lot of conflicts to make the next big thing happen. Here are a few thoughts that might be helpful for you when thinking of your next startup founding team.
As we come across ideas and start sounding them off to our small circle of friends in the community, idea founders almost by default assume their entitlement to become CEO of the startup. “Ideas are worthless, execution is everything” and without a team/company that can commercialize the idea, it will only fill in history books. When you share your idea with your circle, make sure you sound it off people that are better than you in what you do, a team that can better execute than you alone and have the will to step down off the driver’s seat if a team member can drive better. The founder of the idea doesn’t always need to be part of the founding team, and in some cases may not have an executive role in the startup itself.
It’s important to sound off your ideas to your circle of friends in the community and not just any individual with a specific skill you need. The reason behind that is to avoid falling in a dating trap on your big idea; you would want to have dated your co-founders prior to sleeping with them then realizing that chemistry between you and them doesn’t exist. Always remember that talent can be acquired, interests can be aligned, but team cohesiveness is priceless.
Startups can’t afford to have overlapping skill-sets in their founding teams. With that said, there’s no magic formula or number of minimum founding members required for your idea to fly; the number depends on the functions required for your business model to actually work. Two test questions to determine if an individual deserves to be in a founding team as Steve Jobs highlighted are “do we have a company without them?” and “can we find someone else just like them?”. If both answers are no then you found yourself a co-founder, otherwise you can always have this individual as an early employee at a later stage with the right incentive.
Having a unified vision is a very important principle all co-founders must share. Every member of any organization knows what he/she does, some will know how they actually differentiate themselves from others but only a few will actually know why they are doing their work. I love the example Simon Sinek gives in his famous TED speech about Apple; “people don’t buy what you do, they buy why you do it.”
The founding team is the corner stone of any startup, so make sure the 12-16 hours a day you spend in the next startup worthy enough!