(By Michael Fertik)
“A good co-founder is vital, especially since co-founder issues are the reason many early start-ups crash and burn. Like the partners of personal relationships, it helps if your co-founder has strengths that are complementary, not identical, to yours. If you know everything about a particular industry, pick a co-founder who won’t have the blinders you do — especially helpful when you consider that much business innovation comes from people who aren’t in the field.“
Almost nowhere else in the world is the tech entrepreneur glamorized as much as in Silicon Valley.
The Valley is rife with smart, incredibly energetic, tremendously talented new entrepreneurs — instead of stars in their eyes, they have successful exits and Zuckerberg-like acclaim in their sights.
Yet 75 percent of start-ups fail, despite demonstrable ingenuity and an almost superhuman output of hard work.
As a serial tech entrepreneur growing my own company, Reputation.com, I know there are no easy, one-size-fits-all approaches to making your vision come alive and, even more critically, growing and sustaining it. Even with the advice of great mentors — which I was fortunate to have — you can and inevitably will make mistakes.
But as first-time entrepreneurs begin the crucial task of building their teams, here’s what they should keep in mind:
Pick the right co-founder. I’ve said it before but it bears repeating: a good co-founder is vital, especially since co-founder issues are the reason many early start-ups crash and burn. Like the partners of personal relationships, it helps if your co-founder has strengths that are complementary, not identical, to yours. If you know everything about a particular industry, pick a co-founder who won’t have the blinders you do — especially helpful when you consider that much business innovation comes from people who aren’t in the field.
B-school buddies do not make a business marriage. Ah, so you both went to Wharton, did you? Hiring a friend from your MBA program is the business equivalent of saying, “You’re hot, I’m hot — let’s get married!” And just as the odds are good that union will end in divorce, hiring a person based on the emotional connection of shared experience frequently concludes with a rough exit from the company and a goodbye to that friendship. There are many good hires out there. Take the time and pick someone else.
Your chief technologist should be smart and hungry. Early-stage companies are always, always at the “make it or break it” stage. There is simply no rest for the weary and your technologist will have to shoulder a huge portion of that burden. Without this person, there is no product. You need someone whose intelligence exceeds your own and whose hunger to be the driving force behind bringing a product from concept to creation is overwhelming.
Pick a product perfectionist. You might have a vision. Your technologist can build it. But you need a product person who understands the topography of the market — precisely how your product is going to fit, what will drive demand, how you can iterate to generate and harness excitement. You need that person to be a forecaster, both a realist and a dreamer, who can give you reasonable assurances about the right direction to take the product and company at different points in time. Alternatively, just like finding the right co-founder, pursue a complementary hire (e.g. if you’re the dreamer, find a pragmatist).
Don’t hire people you don’t need. From the very outset and for some considerable time afterward, early start-ups are quivering on the brink. That’s perfectly appropriate. While certain hires are buoyancy later in a company’s development, there’s no doubt that in the beginning phases, they’re ballast you don’t need. That’s why you usually do not need to hire a general counsel, finance lead or PR person until you hit a more stable patch. Seriously.
Don’t over-plan for scale. Just like you’ll make plans to ramp up production as appropriate — or map out iterations and product milestones — you’ll do the same for massive hiring. One key mistake is planning an IT infrastructure for a million users before you even have one. Remember — the easiest money in the world to raise comes at the end of this phone call: “I’m turning away 90 percent of my orders because my servers can’t keep up with demand.” Release yourself from feeling the need to hire for scale. Investors will appreciate your careful attention to the bottom line.
(Source: Harvard Business Review)
“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”