It Takes a Team
In Life and Startups
In life, there are many things you have very little control over. However, the one thing you do control is who you choose to spend your time with. Research done by social psychologist Dr. David McClelland of Harvard found that the people you are around determine as much as 95 percent of your success or failure in life [a]. Are the people you hang out with helping you toward the life you want?
When building a team for a startup, it is no different. The first law of successful startups is that markets are like gravity, they always win. If you don’t create a product or service that someone wants and you can’t make revenue or attract the capital to grow it, you lose. Reverse it all and you win. Simple, but not easy.
The first law of successful startups is that markets are like gravity, they always win.
A startup can be broken down into three ingredients:
Team
Product/Service
Market
You have the most command over the team. You can direct the product via your team. But you have the least control of the market, and therefore a startup can only ride the market tides. In this post, I’ll talk about the first ingredient - team - and more specifically the founding team.
The most formative team is the founding team, and what you have the most control over. This team impacts everything else. Without this team there would be no company. During team formation, many investors will judge you based on your ability to recruit the best talent. However, competing against Google and Facebook with no capital is pretty hard to expect the best talent.
In this world, most founders hire based on intent and purpose. Successful founders attract the people you need at the founding team stage - people with adaptability yet determination. Align with values and goals but at the same time thoughtfully curate roles.
Being a designer, I had a lot of ideas but did not know what to do to make any of them into a business. The first thing I did was recruit a business person who was great at business and strategy. He said these ideas sound great but we need an engineer. I told him I knew just the guy, he did backend engineering and we worked well together. The backend guy told me these ideas are great, but we need a front end guy. I told him I knew just the guy, we worked together at AOL and he did a lot of the front end work. We got together at a small boba shop and thus was the genesis of our co-founding team.
A couple of things about our experience make it intent based hiring. First, we knew general expertise needed for our team, then we found people to fill those roles. While they were not the best in industry at the time, they were best for us because everyone wanted to build a startup and wanted to work together. We were aligned on values and intent, diverse in our skillset, determined to build this and committed to doing it with one another.
At Y Combinator, they work with thousands of founding teams. I was lucky enough to work with a good portion of them [b]. Couple that experience with our co-founding team experience, the most successful early stage teams:
Were diverse in skillset. There was usually a builder and a salesperson. These two complementary skill sets covered the key bases needed at an early stage.
Worked in the same direction. They had productive ways to communicate and resolve conflicts so they progressed in the same direction. Co-founder distrust and contempt usually led to breakups [c].
The market is hard enough to fight, let’s not fight against each other.
Had built trust. By the time the team was looking for funding, they had some time working together at another organization or on a previous project. This is why the application asks for a project that the founders have worked on together.
Determined. Founders themselves were determined to make the product or company work. They would see obstacles and see them as challenges, failures as the next step towards success.
Committed. Everyone on the team was committed to the goal to the same degree. In the earliest stages, they were committed to one another and supporting one another. Rejection and failure from investors and customers are rampant; not believing in one another or themselves destroys a team.
Adaptable. They knew they could not control the market and therefore were open to finding different markets or building a different solution.
Ultimately, all successful founding teams successfully build in a big or growing market.
Committed teams were better able to execute successful pivots and more likely to find product market fit [d]. Teams that were assembled rather than thoughtfully curated with intent and purpose tended to disassemble at the first sign of distress. Or when what they were hired for was no longer needed and the direction of the business changed. As your company grows your strategy might evolve to assembling rather than intent hiring.
Building a founding team to start a company is a lot like being in a rowboat. The rowboat is the company and the founders are the ones rowing. Everyone needs to row and it’s pretty clear who is not doing the work. Rowing is not beneath anyone. The waves, which are the market, are strong and it is you and whoever is in the boat who keeps it moving in the right direction. Soon the company grows out of the rowboat phase and if you are lucky goes into the speedboat phase, which means your company is growing fast. And, ultimately if you are lucky, you will be in the yacht phase, which means your company is at scale. [e]
Great teams change over time with the stage of the company. However they have one thing in common at every stage [f]:
The whole is greater than the sum of its parts (Aristotle).
So build your team like your life, with intent and purpose and you will have the most fulfilling experience in life and startups.
When you build with intent and purpose, you will have the most fulfilling experience.
If you want to read more on teams, read these:
Three Types of Teams Your Company Needs as it Grows
Don't Hire A-players, Hire an A -Team
NOTES
[a] You're NOT The Average Of The Five People You Surround Yourself With
[b]What Makes Founders Succeed Jessica Livingston. Y Combinator co-founder and Founders at Work author
[c]How this startup failed (twice) and still found success. Kevin Chou, co-founder and CEO of Kabam.
[d] Segment and Slack are examples of teams that pivoted into markets. They all had worked together before and seemed to have a commitment to making the startup work together.
[e] Three Types of Teams Your Company Needs as it Grows
[f]Guide: Understanding Team Effectiveness Project Aristotle. By Google.