Great start-up teams build great start-up companies. Venture Capitalists know this, which is why they invest based on their assessments of both the product idea and the team behind it. An effective team can execute a start-up vision with passion, precision, and dedication. How, though, do you build such a supportive and well-rounded start-up team whose members thrive off each other? This article explores several key philosophies and techniques for doing just that.
The Success of Your Start-Up Is at Stake
Assembling a strong, supportive, and effective start-up team that can work together, execute on ideas, and pivot when necessary is absolutely fundamental to launching and sustaining a successful start-up.
An often-discussed piece of research by CB Insights bears this out.
CB Insights analyzed more than 100 start-up post-mortems in an effort to determine why so many start-ups fail. Here’s what they found:
Whilst it’s not very surprising to see that more than 2/3rds of start-ups fail because either there is no demand for their products or they ultimately run out of financing, what’s more shocking is the finding that nearly 25% of all start-up failures can be attributed to the lack of a strong team.
These data thus support the notion that ineffective start-up teams can and often do sink start-ups:
“Without assembling the right team, your startup has virtually no chance of success[.] … No one can build a business alone. … You need great people to build awesome products. You need people to market and sell those products and to come up with—and execute — ideas[.] … No matter how brilliant an entrepreneur you are, the fate of your startup ultimately rests on the shoulders of the team around you” (source).
Mark Zuckerberg expresses the same sentiment:
“The most important thing for you as an entrepreneur trying to build something is, you need to build a really good team. And that’s what I spend all my time on”.
Paul Graham, co-founder of Y Combinator, puts the matter like this:
“Starting a startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong. … [However,] [f]ights between founders are surprisingly common. About 20% of the startups we’ve funded have had a founder leave. … Most of the disputes I’ve seen between founders could have been avoided if they’d been more careful about who they started a company with. … The people are the most important ingredient in a startup, so don’t compromise there”.
So, who you work with is absolutely crucial to the ultimate success or failure of what you work on.
But how, exactly, can you go about assembling and maintaining a strong and productive start-up team? Let’s look at 7 specific strategies.
1. Choose the Right People
Whilst there’s no fail-proof formula or protocol that allows you to easily distinguish between people who should vs. should not make up your start-up team, it nevertheless remains true that you must ultimately choose the right people if your company is to be a success.
In this article I want to focus primarily on the techniques you can use to strengthen your team once it has been assembled but, for now, here are a few tips on how to avoid building a team that is destined to fail:
- Paul Graham: “Don’t suppress misgivings [you have at the beginning]. It’s much easier to fix problems before the company is started than after. So don’t include your housemate in your startup because he’d feel left out otherwise. [And] [d]on’t start a company with someone you dislike because they have some skill you need and you worry you won’t find anyone else [to fill the void]”.
- Jordan Ritter: “In order to survive…everyone has to be … 100 percent in. The biggest mistake when it comes to recruiting and hiring for an early-stage company is making sure that the people being considered for the team are fully and totally committed to the journey. If they’re not, they won’t be happy, and neither will [you]”.
- Alex Bard: “Have the confidence and self-awareness to analyze your strengths and weaknesses, and build the rest of your team to complement what you bring to the table. In an ideal world, your founding team will resemble a Venn diagram—some skills will overlap, while each person will have his or her own specialties”.
So, build your company around people who are motivated and committed, who come into the process with a “clean slate” (i.e., free of any existing drama), and who are appropriate choices because they are experts in their respective fields and know how to play well with others.
2. Lead by Example
As a start-up CEO and entrepreneur asking others to believe in and help you achieve a specific vision, you simply can’t expect your team members to trust and follow you if you don’t exhibit the excellence of character that you want to see emulated around you.
Napoleon Bonaparte’s army was so loyal to him in part because he actively joined his soldiers in fighting campaigns.
In other words, he led by example—something you need to do too as a start-up founder!
The well-known Betari Box adequately captures the important idea that one person’s attitudes and behaviours necessarily affect another’s:
This is a simple yet effective illustration of the fact that your attitude as a founder affects the way you act, which then affects both the attitudes and actions of your co-workers.
The Betari Box does a good job of illustrating the cyclical nature of this feedback loop: it can be quite difficult to break a cycle of bad attitudes producing bad behaviours producing more bad attitudes…
It is, thus, crucial that you stay mindful of the ways in which how you think, act, and speak to those in your start-up affects their levels of enthusiasm, dedication, confidence, and so on.
3. Team-Building Exercises Can Work When Done Right
Whilst team-building activities are often unpopular amongst employees, an analysis of data from 103 studies undertaken between 1950 and 2007 provides strong scientific evidence that team-building exercises can have measurable and positive effects on team performance, particularly in terms of trust, coordination, and communication.
One of the keys to designing and delivering effective team-building activities is avoiding unnatural or otherwise forced situations.
If you’re picturing a room full of employees rolling their eyes and complaining amongst themselves after hearing their team leader announce that the entire workforce will be heading into the woods for a private team-building retreat next weekend then you know what I mean by “unnatural” and “forced”.
Successful team-building occurs when such “exercises” are carried out in normal, relevant, and familiar social situations.
Volunteer work (that’s somehow connected to the aims, values, or practices of your start-up), sports outings, fun trips, and shared meals—these are all examples of natural events where authentic team-building can occur as co-workers interact and experience genuine emotions together.
4. Meetings Are Productivity Killers
Meetings are the biggest wastes of time and energy killers in the corporate world.
A study by collaboration software developer, Atlassian, suggests that tech employees spend on average over 30 hours per month sitting in meetings that prove to be unproductive more than 50% of the time!
In addition, the vast majority of employees in the study admitted to daydreaming and/or doing other work during these meetings, with just under half of all people complaining that the meetings were pointless and/or too frequent.
This isn’t too say that start-ups should avoid meetings altogether.
The important factor is effectively determining when to hold meetings and what form the meetings should take.
I suggest that, as a start-up founder, you work with the following decision tree whenever you need to determine whether a meeting ought to be held with your team:
One method for allowing the meetings that you do hold to be more effective is to replace the traditional top-down, long, and boring business meetings with daily scrum (“stand-up”) meetings.
A daily scrum is held in the same location and at the same time (usually in the morning) each day. They are strictly time-boxed (typically to 15 minutes each) in an effort to keep the discussion brisk, on-track, relevant, and impactful.
If you find that meeting daily with your team members is important to the morale, solidarity, and overall effectiveness of your start-up team then try replacing conventional business meetings with a daily scrum—your employees are likely to appreciate the development.
5. Autonomy, Not Micromanagement
Traditional business wisdom and practice both favour micromanagement: sets of upper-level employees constantly watching over and managing the day-to-day habits of sets of lower-level workers.
Micromanaging is supposed to increase efficiency, prevent productivity losses, and make people more “accountable”.
However, start-ups are a different breed of business and therefore they respond best to unique and unconventional ways of carrying out operations.
Research shows that choice and autonomy—not strict control and close supervision—positively impact employee happiness, motivation, and performance amongst start-ups.
Joan Cheverie defines autonomy as “people’s need to perceive that they have choices, that what they are doing is of their own volition, and that they are the source of their own actions”.
“Autonomy…is the antithesis of micromanagement[.] … Instead of focusing on the minute details, you…need to direct your focus to the goals and strategic objectives for each staff member. Let them take care of the minor details of meeting those expectations. If you are able to create autonomy…[then] you’ll find that the details get done without your having to worry about them”.
In order to increase the performance and job satisifaction of those with whom you work, you can provide employees with enhanced autonomy over some (or all) of the following four dynamics:
- When they work (TIME) – For instance, try switching to a ROWE, i.e., Results-Only Work Environment
- How they work (TECHNIQUE) – Give employees another freedom to figure out for themselves how they are to complete required major tasks
- With whom they work (TEAM) – When possible, provide employees with a degree of choice regarding the other people with whom they work. This can be difficult to implement, especially when your start-up is small.
- What they do (TASK) – Try utilizing “creative days” during which time employees can work on any project/problem they wish. A famous (and time-tested) example is Google’s 20% policy: each Google employee is allowed to spend 20% of his/her work week on projects other than his/her main tasks—over time, this practice has birthed many of Google’s core features, including Gmail and AdSense.
As with all core aspects of running a start-up, autonomy ultimately comes down to achieving the right balance: both too much and too little freedom can wreak havoc for your team dynamics and hence disrupt your business.
6. Focus on Intrinsic Motivation
One of the reasons that enhanced autonomy can positively influence job satisfaction and performance is the fact that autonomy encourages employees to draw upon intrinsic motivation.
Intrinsic motivation is drive, enthusiasm, and passion that come from within, as opposed to extrinsic motivation that derives from external sources (such as threats from a boss).
Heidi Grant Halvorson does a great job explaining why it’s crucial for start-up founders to utilize strategies that enhance employees’ intrinsic motivation:
“[Y]ou want the members of your team to see that the goals they are pursuing have real value. In fact, you want them to make the goals their own[.] … [S]tudies show that the greatest motivation and most personal satisfaction comes from those goals that we choose for ourselves. Self-chosen goals create a special kind of motivation called intrinsic motivation—the desire to do something for its own sake. When people are intrinsically motivated, they … feel more creative, and process information more deeply. They persist more in the face of difficulty. They perform better. Intrinsic motivation is awesome in its power to get and keep us going”.
A survey conducted a few years ago by BNET (now CBS MoneyWatch) revealed that 29% of workers identified doing something meaningful as their key motivator for working; 25% of respondents said that money motivated them; and 17% reported that recognition was their source of motivation.
Regardless of perks and bonuses, employees work at their highest potentials when they are personally interested and vested in the results they’re chasing.
Here are a few important dynamics affecting motivation:
- Being Challenged: People become more motivated to succeed when they pursue personally meaningful goals that are possible but not necessarily certain to be attained
- Curiosity: Intrinsic motivation and enhanced curiosity reciprocally influence each other to learn and explore
- Cooperation and Competition: In some situations helping others, and in others engaging in friendly and supportive competition, can increase motivation and drive
- Recognition: According to research by McKinsey, celebrating success as a team and providing employees with positive feedback can be much more rewarding and motivating than offering workers monetary bonuses
7. Use Objectives and Key Results (OKR)
Objectives and Key Results (OKR) represent an effective means of creating structure for companies, teams, and even individuals.
The system originates from Intel, was popularized by Google, and has since been adopted by companies like Zynga, Palantir, and Square.
Here’s a quick description of the OKR process:
- Establish an Objective: e.g., increase website loading speed by 30%, increase customer engagement by 15%, etc.
- Establish a number of Key Results: e.g., Google uses a scale of 0 to 1.0, where achieving a perfect 1.0 notes that the goals were insufficiently ambitious (Google engineers are expected to score around 0.6 to 0.7)
- Perform tasks and calculate outcomes
Here’s a simple example of the OKR in action:
OKRs are beneficial insofar as they represent a simple and straightforward process that effectively encourages accountability on behalf of all those involved.
The method is not exceedingly popular today but a variety of engineers at big companies (e.g., Google, Zynga, Palantir, and Square) have admitted that they were most productive when they closely tracked their OKRs.