Founder Dynamics and Startup Teams

One of the most important and misunderstood aspect of entrepreneurship - setting expectations with founders, aligning incentives, and getting the culture right.

Transcript

1. @rilinho @paorapetti @florenciaclavi4 Startup Teams
2. Execution is Everything • All businesses depend on teams ◦ Products, IP, First to market, etc. only help ◦ Having money can actually cloud mistakes • First products are usually wrong ◦ It’s not if you fail… when you fail → What then? • A company’s priorities constantly change A team’s ability to recognize / adapt / execute is the greatest indicator for success Credit: UBerkeley Lester Center for Entreprneuership
3. Founder Dynamics • Must set clear expectations ◦ Is everyone taking the same risk? ◦ What will the role of each founder be? ◦ What would happen if there is a change / pivot? • Ask all of the hard questions now • Don’t avoid conflict → discuss things openly ◦ What happens in a pivot? • Structure agreements to keep yourself covered ◦ It’s very likely that things will get messy
4. More founders, more dynamics to maintain
5. • Anticipate conflicts of interest ◦ Where one founder is working more than others ◦ When one co-founder has more equity than others ◦ When “life” happens to one of the co-founders ◦ Giving investors assurances about founder friction Ways to Align Founder Expectations VESTING Equity % Year One Year Two Year Three Year Four Founder 1 X% 25% 50% 75% 100% Foudner 2 X% 25% 50% 75% 100% Founder 3 X% 25% 50% 75% 100%
6. Building a team • Avoid similar profiles - diversity helps • Complement not Compliment • Know what you are good at, and add skills that you are not good at • Hire for THIS stage or maybe VERY NEXT stage • Give everyone on the team a chance to succeed Is there a culture fit? Credit: UBerkeley Lester Center for Entreprneuership
7. Best Practices - Hiring Early Stage • Know your burn rate like crazy before • Considering outsourcing ◦ short term gain vs. long term scalability problems If you are going to hire... • Trend towards generalists first (T-Shaped) ◦ Specialists can lose interest, especially with changes • Need “doers”, not just people who sound good • Missionaries versus Mercenaries http://andrewchen.co/building-the-initial-team-for-seed-stage-startups/
8. Building Culture • Startups can (and should) do things that big companies can’t ◦ Opportunities to create a very tight culture → customer service, transparency, focus, clear priorities and KPIs, etc. ◦ Install a culture from the beginning, it’s much harder to change it later • Decide on team values and operations ◦ Job Descriptions (e.j. “Cops”), Sharing, Support, Communication practices, Ownership, Vulnerability, etc. Credit: UBerkeley Lester Center for Entreprneuership
9. Example - 10 Values from Buffer
10. • Get the team to own their responsibilities ◦ Most employees just rent authority and give it back ◦ Job for Boss vs Job for Company → they can hide problems, not ask for help, etc. • Early stage employees will be able to see direct results of their work ◦ This is very unique for a job - founders should use it • Can be very motivating, good and bad, for a team • Requires clear priorities and communication “Ownership Culture” http://www.entrepreneur.com/article/237896
11. • Over-communication is better • Never assume your team knows things ◦ Share successes and failures ◦ Engage people and encourage debate (even conflict) • Communicate often and clearly ◦ Visual communication (body language) is key ◦ Metrics are key for the entire team (north star) • Bad things will happen ◦ This always makes you make up for poor comm Communication First Credit: UBerkeley Lester Center for Entreprneuership
12. Mistakes We’ve Seen Founders Make Ego driven: • Fixated on their own vision for the product • Don’t understand their users • “My” startup instead of “Our” → affects priorities Fear driven: • Fear of unknown • Thinking they can do everything • Micromanagement & Not Delegating
13. Part of the reality • Firing employees (and co-founders if necessary) ◦ Better to avoid the snowball (bigger problem later) ◦ Easier if you have solid communication in your team ◦ You can pick up the slack - most people are 80% replaceable • Have to know your legal obligations ◦ It is much different in Uruguay, than in the US • Do not put your culture and focus at risk http://www.bothsidesofthetable.com/2011/05/26/startup-mantra-hire-fast-fire-fast/
14. Founders (Leaders) are going to need to • Maintain customer focus: ◦ Empathize with users ◦ Maintain their love (not their “like”) • Give an example to the rest of the team on a day to day basis • Recruit people better than themselves • Stay “Humble / Ambitious” - keep ego in check • Be willing to execute - learn and change course Credit: UBerkeley Lester Center for Entreprneuership
15. ¡Gracias!