One of the most important, and most likely underestimated, elements of a startup, is the team. Most often, the main reason startups implode is because their teams implode. This doesn’t just happen in the beginning. In case the team members see the world differently, this implosion and value-destruction can happen even when the startup is well on its way to success.
Some of the main reasons why startups implode are captured below.
Loyalty to the tech: Tech founders are often more loyal to their tech than to the startup. If they continue to work at their research institutes, the risk for the startup is that their primary focus remains the research. Which gets us to our next concern.
Tech ivory tower: In the face of uncertainty, which implies just about everything in a startup (market definition, investors, IP strategy, cost-plus or value-added, initial customer-focus and strategy, manufacturing strategy, to name a few), tech team members sometimes go back to their zone of comfort, which is tech research. Unfortunately, filling more air in one tyre is not enough to get the car moving, if your other wheels are missing.
IP vs peer reviews: Tech team-members are predisposed to peer-reviews. Their first focus is to publish their research. This is contrary to the focus of a startup, where new ideas become the source of IP, a source of competitive advantage. (discussed in a subsequent blog in more detail)
Size: Different team members have different visions of what constitutes ‘big’, when defining how the startup will look 5 years down the line. This is the least asked question between founders. One founder may see a 15 man company doing $2 million annually with operations in 3 countries, whereas another founder may visualise operations across 30 countries and a work force of 500 people.
Funding: Founders tend to be close to their ideas and technologies. In some cases, this proximity tends to be closer than what is strictly in the best interest of the startup. Some times, technology founders tend to perceive an ownership over the technology where they can’t see an investor coming in and ‘taking the technology away from them’. This results in the startup being limited to growing organically, since without investor funding, very few startups can truly scale.
Tech or business: There is often a conflict between how business and technology co-founders see the world in their startup. For team-members who come from the world of technology, the key priority is often the ongoing improvement of the technology, since this is (ostensibly) what the startup is built on. This view becomes a belief and eventually a conviction the longer the tech c0-founders are in the world of research, prior to starting the startup. The business co-founders, on the other hand, see the world as customers who have a requirement and try to identify the minimum viable solution that can be provided to early adapter customers. This dichotomy results in tech teams over-researching the tech to the point where the startup’s solution becomes technically over-engineered and commercially obsolete. It is in these cases that the inferior solution becomes the standard.
Boats: Tech team members are used to working on multiple tech simultaneously. This often continues once they transition to the startup, and when they continue to work at their university. This not only becomes a critical distraction but also raises ethical questions, particularly when there are decisions that can impact the startup and their research like funding questions or questions related to either/or.
There are many more team challenges covered in the following blog.
Your journey as an entrepreneur is a long and winding one. Select well and prosper.