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How to build the team for our startup

Posted at — Jun 7, 2019 by Abishek Muthian

Building the core team for a startup is the most important activity for the founder after the startup idea has been validated . Experts recommend to spend 6 months to 1 year on building the core team before launching the startup, as the core team can make or break the startup.

Today we will see some crucial roles and team building strategies for our startup.

Co-founder

Founder is the person who launches the startup. One can run a startup as a single founder, I've been one; but for all practical reasons and to provide better probability of success to our startup, we will have co-founder(s).

A co-founder should believe in our startup mission, it is better if they had faced the problem we are trying to solve with our startup and more importantly balance with the skills in the areas we lack. So it is essential to retrospect our skill-set before approaching (or) searching for a co-founder.

It is typical for a startup to have co-founders who have known each other for a considerable period, enough to build trust between each other. Trust is crucial for the stability of a startup, last thing we need is in-fighting among founders in a startup.

Not everyone would be lucky to find a co-founder among someone who they already knew and trust, in that case we'll have to look out for a co-founder and build new relationships.

Starting point to look for a co-founder is, to find someone who share similar interests at the same time has different perspective in those interests. We don't want someone as co-founder who always shares same perspective as ours, as it would be counterproductive.

Investors have their way to look out for subtle nuances in relationship between co-founders, like in an interview if one founder does all the talking (or) when the other is not given a chance to speak; it usually means one founder is dominating the other. Such type of relationship between founders are usually a red flag to the investors.

Accurate self assessment of our own skills and acknowledgement of the co-founder skills is crucial for the success of a startup.

Alexis Ohanian although majoring in humanities fancied himself as a programmer until he met Steve Huffman and realised he's not going to do programming for a living. Steve Huffman majoring in Computer Science always wanted to do a Business major until he met Alexis and decided Engineering is the path for him. They went on to create Reddit with their acknowledged skillset and chosen roles.

Engineers

Engineers are crucial even for a non-tech startup, if that startup has at-least a website. It is advisable to have a co-founder who has wide technology experience if the startup is a tech startup.

It is typical for a startup to have the technical co-founder serve as the CTO (Chief Technology Officer) in the company.

If the startup is working in high-tech space it would fall upon the technical co-founder to help create and manage the core engineering team of startup during the launch. It is not un-common to see engineers themselves being co-founders of a startup.

Engineer for a startup is expected to have experience in different domains to be able to contribute for the development of the product/service. If we consider software engineers from large BPO service companies or hardware engineers from large supply chain companies, they are usually unfit for a startup as they typically lack knowledge of end-to-end process and latest technologies which help in the startup philosophy of 'build fast and break things'.

But there are always someone who goes beyond their job description to develop skills and keep up with industry trends; it is up-to the technical co-founder to find such people to work with in their startup.

It is easier for a well funded startup to recruit established engineers from successful startups or large product based companies, who have vetted and hired the best engineers.

Marketers

Building a product/service is much easier than it is to sell them, hence a marketer in the core team of a startup during launch is absolutely mandatory. Like the CTO, it is best if the CMO (Chief Marketing Officer) is also a co-founder of the startup.

Unlike engineers, marketers from BPO service companies and supply chain companies can add value to a B2B startup i.e. selling products and services to businesses with their expertise and networks. But a marketer for B2C startup which sells products/services to end users require someone who has experience in selling products/services to end customers.

Sales

An independent sales team is crucial for a startup's growth. The sales executive should be able to find those who are in need of our product i.e. whose problem our product solves and sell it to them. David Sacks has written a simple math to set up a sales team .

But it's likely for the founders of a bootstrapping startup to do sales themselves, in that case Micael Oliveira gives 10 tips for Founders doing Sales ranging from being passionate about our product to celebrating every win.

Team Size

A common myth regarding the size of a startup's team is that it needs to be as small as possible, But it's not about being small but having right team size to get the job done.

But determining the right team size is hard. For decades startups considered the 'The two pizza team ' paradigm i.e. No team should be larger than the number of people that can be adequately fed by two large pizzas, as the mantra for organizing successful software teams.

But Jeff Bezos, who came up with the two pizza teams for Amazon realized that it doesn't hold up and changed the strategy to something more rational - Single-Threaded Leader (STL) .

Single Threaded Leader involves one highly skilled leader whose one and only job is to manage an autonomous team. There's no doubt that STL has resulted in making Amazon what it is today, even though STL could be considered a luxury for entry level startups it can also be capital efficient considering the money a startup could loose when a product team is in disarray due to a ill-quipped, over-tasked team leader.

Hiring Freshers

Hiring graduates who have just passed out of college for a startup to be launched is a difficult decision, at one hand they can provide cost-benefit if done right and at the other they might inhibit the growth of the startup and ultimately lead to the failure. I had hired in-experienced freshers when I launched my startup and personally trained them to be software developers; they became good developers in couple of years but never became good executives as I didn't train them for it. Training is painstakingly laborious process, a time best put on growth of the product in a new startup.

Mileage of recruiting freshers can vastly differ in a new startup . Post doctoral graduates from reputed universities working in the hi-tech field such as Artificial Intelligence, Machine Learning, Data Science, Blockchain are proving to be a valuable asset .

An individual can be in-experienced when it comes to the position of holding a full-time job, but cannot be in-experienced for the job description in a new startup.

Transferrable Skills

Often overlooked, but a highly effective strategy of hiring is recruiting someone who has skills which could be applied to our area of work but is currently working in another domain.

Best example of this strategy is the one followed by Renaissance Technologies . They have some of the most profitable quantitative hedge funds on the planet and yet they don't hire anyone with finance background. They hire only scientists.

James H. Simons Co-founder of Renaissance, a mathematician himself said he once approached an astronomer with an offer to work in his company, but the astronomer couldn't take up on the offer immediately as he was working on some important project and the astronomer eventually went on to win a Nobel Prize in astronomy for that project.

The reason why James Simons, tried to recruit the astronomer was because they are used to looking at large trove of data regularly, a skill which can be highly useful for quantitative trading.

James H. Simons might be a bar bit too high for a budding Entrepreneur, so I'll give another excellent case for a transferrable skill.

Ethan Brown's Beyond Meat is disrupting the food industry, Beyond Meat produces plant based analog to meat and its so good that Beyond Meat's burger is kept on the same aisle as the regular meat burgers in supermarkets.

So, it's natural to think that Ethan Brown must have his background in Food Technology. Well, his professional background before Beyond Meat was much more fundamental - Energy; especially Clean Energy.

He understood at the fundamental level that the components of a meat - amino acids, lipids, very small amounts of carbohydrates, trace minerals like water are also found in the plant kingdom; so he knew off the bat that plants can be used to create meat with equivalent energy and he set out to do it.

Ethan's background and passion for Clean Energy contributed immensely in his quest for sustainable plant based meat. After a decade of persistent research and development; now we can taste The Beyond Meat®, Cheddar and Egg Sandwich made up of 100% plant-based ingredients at STARBUCKS.

Hiring Friends

Many successful companies and startups were founded by friends, there's a reason for the investors to rate startups founded by friends higher. Friendship is the easiest way to ensure that the founders trust each other.

But what's not talked about these startups are, whether the friendship stay the same after getting into an entrepreneurial relationship?

It's no secret that 'founder friends' of several successful startups have broken their friendship,  often leading to disputes regarding the company they founded . It is not that only friends lead to co-founder conflict, it can arise due to any number of reasons but a co-founder conflict among friends would mean an end not just to their early stage startup, but perhaps something more valuable.

Friends as employees have totally different dynamics than friends as co-founders. Co-founder gets equal stature as everyone else who was the part of founding team in a startup.

When a friend is hired as an employee after the startup is launched, there are always occasions which can cause friction between friend(employee) and friend(co-founder). It's best to avoid hiring friends who will be in the position to report to us just as a regular employee.

Friction in friendship between the founders is not always permanent or necessarily come at a cost to the startup. If the friction is identified and rectified early then the relationship between founders only grows stronger along with the startup. So was the case with Reddit.

There came a point when Alexis Ohanian and Steve Huffman didn't see eye to eye, eventually left Reddit, a company they co-founded after being best friends.

The reason as explained by Steve and Alexis,

By the time we left Reddit we were not at the best of terms. We've been through a lot together but we never discussed our roles at Reddit, our boundaries, we didn't really have a way of resolving disputes and we didn't see a ton of each other(different locations).
- Steve Huffman


There was a lot that went on that period for sure, But we never exercised the muscles that founders have to exercise but best friends don't. It's great to start a company with one of your your best friends but the conversations you have to have as co-founders are very different from conversations you have to have as friends and we didn't have the hard ones often enough.
- Alexis Ohanian

After several years of not being in contact, Steve reached out to Alexis and they agreed to put effort into repairing their friendship. They even went to a therapy together, eventually mending their friendship and returning back to the Reddit to uplift the startup which was in a downward spiral ever since the duo left the company.

Meeting Potential Team Mates

Finding potential candidates for the team is a time consuming but worthwhile endeavour for building the team. Assessing individuals for a startup is a prolonged process to be done under different environments where the individual is best suited to exhibit their talents.

Individuals with entrepreneurial ambitions can be found in ecosystems where their skills are highlighted e.g. LinkedIn (public discussions on domain specific topics where the individual's authority on that domain and perspectives are established).

Startup conferences with specific agenda and when we know what to gain from it is a good place for meeting talented individuals e.g. TechCrunch's Disrupt. But beware of most startup meets and conferences, they don't function with a clear agenda and end up wasting time & money.

Talented Engineers are relatively easier to find online from Stack Exchange, hackaday, Ycombinator's hackernews, tindie etc. i.e. places where problem solvers, makers, creators hang out.

Marketers from companies which sell products similar to our startup and do it well, can be found from LinkedIn.

If we do meet someone whom we think would be the right person for our startup, we should refrain from asking them to collaborate with us till we have built a reasonable relationship. A smart individual would avoid collaborating with someone they have just met, so we should invest time in knowing each other's strengths & weakness before committing to collaborate on a startup.

Not hiring someone like ourself

Hiring someone who thinks and acts like ourself could be an attractive hire, but they don't add much value to our startup. Where as someone who thinks differently, have their own way of achieving their goals but at the same time shares a common passion would be an indispensable asset to the company.

Everyone would agree that Tim Cook shares no similarity to Steve Jobs as far as working style is concerned, but that's the reason why Steve Jobs hired him and we all can see how it is working out for Apple.

Hiring extraordinary individuals requires justifiable capital, we will see how to build the capital and distribute equity for our startup in an upcoming content. To discuss about this, future content and to ensure that it is not missed, subscribe to hitstartup.

Job Satisfaction

Almost everyone who seeks a job wants a satisfying job and employers like to think that the work they offer is satisfying. But, little thought goes into analysing what makes a job satisfying?

Amy Wrzesniewski, Professor of the Organisational Behaviour at the Yale School of Management has studied this question her entire career. According to her team's research , those who perform 'Job Crafting' in their work tend to be more satisfied with their work.

'Job Crafting' is the physical and cognitive changes individuals make in the task or relational boundaries of their work.
-Amy Wrzesniewski

Amy and her team performed their studies at a hospital among cleaning staff, few of the staff reported higher job satisfaction than the others. Those who reported higher satisfaction with their jobs are those who went beyond their job definition.

In the case of the cleaning staffs, those who cleaned even the ceilings for the sake of the patients who had to look at them all day, those who finished their jobs but returned to speak to the patients or their companions because they were feeling lonely; reported higher levels of job satisfaction.

These people considered their jobs special and said that it required extensive training to do it. Where as cleaning staff at the same hospital with lesser job satisfaction said that their jobs are like any other job and can be performed by anyone.

Amy says this behaviour of job crafting resulting in higher work satisfaction is visible across all industries.

I think as a founder, it's our responsibility to create flexible, transparent roles in our startup for our team to perform job crafting and employ those who would craft their job.

But how to identify those who would perform job crafting? Amy Wrzesniewski says, the difference lies between those who wait for their dream job, their calling to come and those who make the best use of their job at hand.

About Leadership

Who makes a good leader? Traditional wisdom tells us that a leader should be able to handle power.

But how can we identify people who can handle power? Popular media would make us believe that a person who can handle power is Machiavellian, ruthless, self-centred etc. but science tells us otherwise.

Research into power dynamics shows that kids at school, kids at summer camps, people in colleges, people in organization if they are emotionally intelligent, if they focus on others, practice generosity, they rise in social power says, Psychologist Dacher Keltner at UC Berkeley.

So, if we are looking for someone to lead our startup company, looking for someone who display altruism, kindness and social intelligence is a good bet for the role.

But, not so fast; then there's the paradox of power. We have seen several philosophical and even historical evidences to know power corrupts people. It was best phrased by,

"Power tends to corrupt, and absolute power corrupts absolutely."
-Lord Acton, 1887.

Dacher Keltner in his book 'The Power Paradox: How We Gain and Lose Influence' Buy explains the research which showcases this power paradox i.e. people who poses positive, ethical qualities rise in power, but once they attain power they tend to undermine the very same qualities.

The seduction of power is far too great that, almost everyone who attains power succumbs to its paradox. Yet there are few great leaders who have escaped this paradox and seems to have managed the power vested in them. One such leader sighted in Dacher's book is Abraham Lincoln; Even at the peak of his power, Lincoln treated everyone with dignity and respect even those who were are the opposite side at the war.

So, if we are looking forward to lead our startup or if we are looking for someone who could do it, it's essential that one needs to poses the necessary qualities to rise in power and when the power is attained; there should be self-control to preserve those qualities which helped to rise in power.


This content evolves over the time as I gain new information and knowledge on the topic as evident from the change log below. The best way to receive updates on such evolving content is by subscribing to hitstartup's Not a Newsletter .

Change Log

November 2020: Reddit - Co-founder - Hiring Friends.

April 2020: Transferrable Skill - Beyond Meat's Ethan Brown.

April 2020: About Leadership.

November 2019: Job Satisfaction.

September 2019: Not hiring someone like ourself.

September 2019: Transferrable skills.

The Power Paradox: How We Gain and Lose Influence by Dacher Keltner

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