10 Considerations for Building a Startup Team

Traditional, and highly insufficient, wisdom has been that a founding team should consist of 3-4 members with combined skill sets of engineering and the business. While this sounds about right, it is too general.  In this article I will go over some of the key roles, skills, and company-culture aspects that should be considered when you are putting together your founding team.

1) Company Culture

Perhaps an older school of thought may frown on starting the article by discussing company culture instead of its products, markets, technology, or other things that may be considered more tangible.  But building a team is precisely the process of building that certain glue that holds the moving parts together.  This glue, which is the team culture, connects and effects each team member and plays a large role in how they go about their daily tasks.  It effects how innovative they may be and how much creativity they may be able to muster.  It will also ultimately shape how your company will appear to the outside world.

Different managers have varying styles and opinions on the “best” culture. The leading though leader on this topic is Tony Hsieh who is the founder of Zappos, which is an immensely successful company.  Tony’s approach is to treat everyone with respect, equality and always try to make everyone as happy as they possibly can. This makes the team more fulfilled and the customers more satisfied.

2) Engineering Team: The Architect

This position is one that does not stray from the traditional approach.  You absolutely need someone to be able to architect whatever system you are building to be flexible, adoptable, and extensible.  Notice that I did not say scalable.  When you are in the stages of founding a team, chances are that for the first year or so, you will not face scalability problems.  Instead, you will be innovating with trying to implement different features which will make your product a winning one.  For that, you need the core piece of the puzzle to be architected with a vision of being flexible.

The architecture of the software would is not a full time job at a start-up.  There isn’t enough to architect.  Most of this person’s time can be spent also developing these features.  If the person is very good, he will also have product and usability vision which will help him get the features right from the first time and take away the necessity of having a very involved product person.

3) Engineering: The Front-End Engineer

Ideally, you should also add a person who can do all the following roles: user interface design and development, graphics design, and help the architect develop some of the server-side features.

If possible, this person would also help out by doing SEO, or participate in some of the social media efforts.  Ideally, this person would be young, hungry to learn, energetic and very inventive.

3) Traditional Marketing

Modern consumer-web marketing is two-fold.  There is the old and ever-tightening consumer feedback loop where the marketers get in contact with existing and perspective clients and listen to their current and future needs.  After listening to the needs of the people they reach out to, they help mold the future of the product by making sure that the needs of those people will be met with upcoming releases of the product.  This skill takes market and industry savvy as well as experience in knowing when to listen and when to sense that accommodating a particular request will not ultimately bode well for the future of the product.  While that type of role takes some seasoning and experience, younger people tend to excel at social media marketing.

4) Social Media Marketing

During the last few years we have all been witness to a rise of a new paradigm on the web: the social web. The social aspect of the web has given rise to the social aspect of marketing.  You must have someone on your team who can make your brand leverage Facebook, Twitter, Stumbleupon, Digg, Reddit, and a number of other social networking sites.  This person must also have enough social-web savvy to make the right suggestions on how and where the actual product should leverage and encourage social use.

In addition to social media marketing, there is also a need for SEO/SEM marketing.  This is another dimension that the small marketing team must master.  SEO is a long-term approach to generating great free leads and SEM is a way of buying those leads.  No modern consumer focused web business can afford to not focus on these.

5) Domain Expertise

Whatever the technical or marketing skills the team members may have, at least some of the people should possess industry background. As an example, if you are building a fashion site, at least a few of the people should have strong background in fashion and an understanding of how the fashion ecosystem functions.  The team members should also have high visual intelligence because their fashion-centric customers will.  If the founding team does not have domain expertise, it may find itself floundering when it comes to making difficult product decisions and needing to bring extra people on board, which will stretch the already limited resources and make communication cycles more complex.

Prior knowledge of the domain you are going to work with is essential.  It is one of the top criteria potential investors may look for when evaluating your team.

6) Passion and Life/Work Imbalance

This is part of the overall company culture and is a very important point to consider when forming a founding team. It is monumentally important that the founding team is on the same page when it comes to commitment level both in terms of daily and long-term involvement and sheer effort.  Ideally, everyone would put 110% into the business.  Too often there are people who put in a 30% effort while working other gigs on the side or simply by not working hard enough.  Over time, large differences in commitment and effort between the partners can create discord and feelings of being taken advantage of.  Expectations have to be laid out and discussed before creating the
founding team.

7) Partnership Agreements

It is a far too common an occurrence when founding members decide to split the company equally, sign some roughly-sketched paperwork, get started, and after a month have someone quit the project and walk away with their share of the company which may range from 20-50%.  Obviously that cripples the ownership structure. If you are working with partners, you must have some knowledge of legal implications of your partnership in case someone under-performs.  You also need to have laid out agreements on what happens in case of decision or voting stalemates.  The same thing is true for ownership vesting schedule or intellectual property.  These are just some of the very basic legal implications of working with co-founders.  It is your responsibility to research the implications of your collaboration to protect yourself and the company.

8) Long-Term Goals

Many young entrepreneurs dream of hitting it big and making millions of dollars.  When people stick around through a number of companies, and become serial entrepreneurs, it tends to be as much for the love of the process as it is for the money.  They might not want to sell and cash out when the first opportunity presents itself.  They might just want to build a company, grow it and keep it.  Don’t assume the people with whom you are starting the business have the same aspirations as you do.  Always ask something along the lines of “what is your goal for starting this business?”

If you love starting businesses, it may seem to you that so do others.  Similarly, if you want to make a lot of money, it may seem to you that others will automatically want that as well.  People are very different and you should not assume that you understand where they want to take the business long-term.  Always ask and make sure you are in agreement.

9) How Well Do You Know Your Partners?

Since you are embarking on a potential multi-year collaboration, it very important that you have had some sort of a working relationship with your potential partners.  They may be past co-workers, friends you easily get along with, people with good industry reputations, or people who in the very least case have worked for a reputable company in the industry.

Finding the right business partners is a little bit like dating.  You have to work with many people before you get a sense for what type of partner is right for you.  You can’t just jump into a venture with people you barely know who you hope will work out. If you do, you are likely to find yourself in a relationship which isn’t right for you.

This ties in to the point of a currently popular way to find co-founders in local entrepreneur events or meetups.  While the meetups truly are a great resource, be careful about jumping into a long-term partnership with someone you just met.  You are introducing a large risk by becoming
partners with people you recently met and have not worked with.  You will only find out how compatible your collaboration truly is, only during the collaboration.  If it does not work out, it may add negativity or cripple the culture and stability of the project.

10) Are Your Partners A, B or C Players?

The old saying goes that if you work A-level people, you will make A-level products.  If you work with B-level people, you will make C-level products.  And if you work with C-level people, you will make failing products.  Don’t settle for people close to you, or who happen to possess a particular skill set.  Look at the bigger picture.  The team member is only an A-player if he satisfies just about all the above criteria.  Having a certain skill is only a minimum requirement.  On top of that, the person must be a hard worker, fit into the team culture you aim to foster, excel at their craft, and share your long-term goals and commitment level.

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