90% of all startups fail within the first three years of their inception.
The No 1 reason - they were founded by wrong teams.
Reason No2 - there was no market need for their product/service.
In the coming series of articles I will be addressing these two issues, showing how a little planning and preparation can overcome major pitfalls that trap entrepreneurs, saving you money, time and effort along the way. Today let’s look at how to build the right team.
1. The Right Expertise AND The Right Character
There’s a lot of research out there suggesting what should be the right composition of a team.
A study done by an NYU Stern Professor Jason Greenberg, for example, found that teams comprised of co-workers had a 2x probability of success over those started with family, and over 7x than those started with strangers or friends who never worked together.
A Dutch business analytics company Golden Egg Check offers what is probably the most detailed description of a winning startup team yet:
They suggest that teams, composed of 3 founders, with master degrees and experience from 4 prior startups, who work 45-50 hours a week and have, throughout their career, obtained 4-8 years of industry and managerial experience, have the highest probability of success. Additionally, this team should use customer metrics to enable the best possible business decisions and have a rich network of helpful mentors.
Having people with the right expertise, skills, a similar work ethic, and a strong network is obviously going to contribute to a startup’s success.
One thing these studies seem to leave out is that businesses are made of human beings. The dynamic between the team members is crucial, just like it is in any other relationship, and certain character traits seem to contribute to building a successful team more than others.
1) Good listeners
Working in a startup means putting in a lot of effort with little certainty about the success of the outcome. Stress and tension is bound to get high. Having a team made of good listeners means you’ll be able to have constructive conversations, where everyone understands and values each other’s point of view, avoiding unnecessary conflict and arriving at the best decisions for the company.
2) Thoughtful
The ability to relate to others without being self-absorbed, to give without taking is something we can all benefit from. It’s what builds strong teams. A typical entrepreneur is usually portrayed as a competitive A type personality, full of self-centred ambition and, for the most part, materialistic goals. While having a personal drive and motivation is definitely a must for anyone starting a business, this should not overshadow your humanity.
3) Inquisitive
It has been shown that people with ‘hungrier minds’ are not only more creative and open to new ideas, but are also generally more tolerant of ambiguity. This is extremely beneficial in the complex, ever-changing and unstable world of a startup.
4) Dreamers
Startups usually have little to nothing, with, as the statistics show, all odds stacked against them. The ability to dream big means being able to vision a life that you know you’re destined to live, even if you’re not living it today. Simply put, it what keeps the fire burning.
5) Doers
One thing is to have an idea and a beautiful dream. A completely different thing is put in the day-to-day labor needed to make this dream materialise. Having people who are motivated, disciplined, focused and hard-working is essential.
2. Don't Create Silos
One of the pitfalls many teams fall into is separating functions and hierarchical levels to achieve efficiencies.
It is common for the person who came up with the business idea to assume the position of the CEO and to take on all business management tasks, while the co-founders focus on the technical side of product development or marketing.
It may seem reasonable to divide tasks at first glance, but in reality it only creates silos, often breaks trust, and pushes people to suboptimize.
On the other hand, when everyone is involved in the process equally ideas get built for execution from the start and everyone owns them. People feel valued and don’t see themselves being treated as brainless doers to command. Everyone stays aware of the big picture, which maintains direction and excitement, and closes loopholes for procrastination and halfhearted efforts.
Having the right team is crucial for the success of the startup. I hope this post showed that having people with the right character, qualifications and a strong work ethic, as well as keeping everyone involved in the decision-making process will create a team prepared to work for success. My next post will go through the second step to business success - finding out your current state of play - so keep an eye for that. All the best to your venture if you’re starting one and feel free to ask questions, comment and share your experience if you’ve went through the process of launching a business in the past.
Sources:
W. Chan Kim & Reneé Mauborgne, 2017. Blue Ocean Shift: Beyond Competing. Proven steps to inspire confidence and seize new growth. Hachette Books: New York.
https://www.slideshare.net/mikewchan/what-makes-31587802
https://www.forbes.com/sites/neilpatel/2015/01/16/90-of-startups-will-fail-heres-what-you-need-to-know-about-the-10/#6dfc63146679
https://www.cbinsights.com/research/startup-failure-reasons-top/
https://www.blueoceanstrategy.com/blog/five-steps-making-blue-ocean-shift/
http://veecee.co/the-8-characteristics-of-the-perfect-startup-team/
https://hbr.org/2014/08/curiosity-is-as-important-as-intelligence
Photo by Matheus Ferrero on Unsplash
Disclaimer: All of the content on this blog is inspired and based on the work of Professors W. Chan Kim and Renée Mauborgne, the authors of global best-sellers Blue Ocean Strategy and Blue Ocean Shift: Beyond Competing. The blog expresses my opinion and not the opinion of Kim and Mauborgne. I am in no way affiliated with them, and have not been sponsored to write this content. I am not a certified business consultant, but a fan and an enthusiast of Blue Ocean Strategy, believing that the more people become familiar with the ideas of the two professors, the better and more prosperous all of our lives will be. For more information on the authors, their work, and the books please visit www.blueoceanstrategy.com