Founding Teams: 5 tips for a great team
Taking the plunge and diving into the great unknown that is starting your own business is an exciting time. ?It is a time marked by so much promise,?opportunity and optimism. ?There is no question that your idea?is going to succeed and?success?will?change?your life -?you will change the world.
The light bulb is shining bright on you and your business - but there is an important question to answer that will have a?dramatic impact on the success of your startup. ?Setting yourself up for failure from the start is never optimal.??Keeping your?business outside of the majority of businesses that fail to see out the first 5 years and inside?the 1% that go on to $1billion in revenues is a daunting task.Don't panic just yet, most businesses will see out their first test - but remember ideas are the starting point, they have no value until commercialised. Some of the best ideas fail. ?The reason?for this?failure isn't a lack of capital and it definitely isn't poor timing,??it's put down to poor execution.Executing a?business model isn't easy, it's?a?24/7 commitment, you'll need to be prepared to?strain your?relationships and you may?even burn out. ?The outcome though is what will drive you, just like every successful entrepreneur - seeing your product or service change the world?makes the?pain worth it. ?This is?why entrepreneurs try, fail and try again.So why do many entrepreneurs fail to execute?The simple answer is the founding team fails to work out. The team may have a great idea and a great plan, but having a team that cannot execute means success will be an aspiration.Notable investors such as Andressen Horowitz, Australia's Blackbird ventures, US incubator Y Combinator,?all look to the?founding team before investing.???Some angels will even skip the?financial projections and?current generation of the product.?The common thought here, is a?great founding team will work out the finances and product. A great founding team?will execute and will?pivot and will?show?a deep understanding of each other.To help you piece together what makes a great founding team, we have reviewed and summarised?material from Google Ventures, venture capitalists, angel investors and startup incubators. ?Here are our?five tips to a great founding team.
1. Size of the founding team
The founding team should be more than 1 person,?the optimum size 3. ?Many incubators will not even look at a founding team of 1 - how can you bounce ideas of yourself, who will tell you?you are crazy, how can you do everything a 24/7 startup needs?by yourself. ?True there are amazing people out there who can do it by themselves, but for most of us, a?team is needed.
2. Founding team should have a history together
The founding team should have history together. ?Understanding each others strengths and weaknesses is important.??This understanding comes from either have a history of?working together, or even through childhood friendship.Many?seed investors prefer to see childhood friends?in the founding team - not all need to be but it definitely helps.
3. Complimentary Skills
The skills of your founding team should be complimentary. ?Not all of your founding team need to be technically focused, a good founding team generally has a team member who can sell, another who can keep things organised and another who can develop the product.
4. Focused on product
Your founding team should not be focused on money, you?should be passionate about solving the problem and have an understanding of?the market you?are addressing.With a large percentage of business failing and an even smaller percentage ever achieving more than $10 million in revenue, having a team that is focused on money is going to be distracting. ?The?focus during?the early years is on solving a?problem (even if they don't know they have one)?and designing a business model around that solution, which?is repeatable and scalable.Wealth is an outcome of getting it right and not the other way around - so be prepared to work with less. ?Aspirational goals are fantastic and will keep the candle burning, they should not get in the way of the product. ?Just remember, having a perfect product at the start isn't a requirement for success - start small and aim big.
5. Prepared to test, test and test again.
Be prepared to change. ?Startups are about developing a hypothesis, testing it in the market, evaluating and then starting all over again until you get it right. ?If your founding team dislikes uncertainty and is?not prepared to move from your original idea, or try and try again, then this is not the right team.------Just remember creating a?startup isn't easy, nor is?finding a team that can execute, but you must be able to delegate responsibilities and trust those around you to execute. ?Many budding entrepreneurs will want to hold back the equity for themselves, while this is understandable, there is no "I" in team.??If you are more successful with a team, then you will be better off in the end anyway.