How do you get a team together in a startup?

One of the main things in a startup is the team.  I would argue that this is the most important element in the startup.

There are two components to a team.  The first one is the composition of the team.  This includes technical, manufacturing, marketing, finance, legal and management (!) people.  The second is the mindset of the people in the team.  The second is the one you need to look at more carefully.

A key tenet of how to get the team together is to evaluate if, for any expertise required, whether it is required at a given point in time or if it is likely to be ongoing, as the startup evolves.  If any expertise is required as a one-off, it’s far better to not get these individuals as part of the team and simply pay them off for their effort.  As an example, expertise for starting the company will only be required during the founding.  It is thus easier to pay the individual involved and get the work done.  The reason is that more founders multiply the complexity in a startup, as it evolves.  On the other hand, expertise that may be of relevance as the startup evolves, such as an entrepreneur who’s started a startup in the past and has done fund-raising, may be of value at many stages, including investor-negotiation and future commercialisation.  It is thus far more effective to give equity to such individual, since you can then call him anytime and not have to pay on a per hour basis.

The composition of the team depends on the focus of the startup.  If the startup is inherently technology-driven, it is clear that a preponderance of technology expertise, rather than holding the relevant IP, is a pre-requisite.  If it requires manufacture to commercialise, it is critical that manufacturing expertise be integrated into the team at the earliest stage possible.

Even for a tech startup that does not require manufacturing expertise, unless it’s a pure software play, it is of value to have manufacturing people on tap, if not part of the team.  This is because even if you want to license the technology, the more you know about where your tech will ultimately fit in a larger solution, the better positioned you are to capture value by pricing your tech better and not leave money on the table.

With regard to marketing, this can be dispensed with if you’re a tech startup focussing on manufacturing, since it may take many moons till you get the product mature enough to get out the door.  Unless, of course, you’re a US company, in which case the perceived value of a startup seems to be as much based on the impressive manufacturing facility and sales and marketing people as it is to the (evolving) technology used.

Getting management people involved in a startup at a very early stage is a risk, since they are used to systems and their first instinct is to get systems in your startup.  This poses a risk, since your startup will either get bogged down if systems are put in place too early or will outgrow them in short order.  An example is a 30 year veteran I once hired for one of startups which had less than 5 people at the time.  He tried to push for SAP!

The second and far more important element of the team is the mindset.  For each team member, it’s important to ask what their vision and motivation is behind starting the startup and what they expect the startup to be, 5 to 10 years down the line.  It is shocking how few founders ask this question.  Dichotomy within these conflicting visions are the seeds of conflict.

There are few more insightful questions to potential team-members than ‘What do you seek?’