Key to a Company’s Success: TeamworkBy Michael Parduhn
This is the second in a series of articles that deals with issues related to starting a new business.
What is the most important factor in a company’s success? Is it the technology? Perhaps it’s getting smart money from the right Venture Capitalist? Or having a beautiful PowerPoint presentation? Wrong, wrong, and wrong. It all comes down to the team. You could have killer technology, the perfect VC, and the most attractive presentation, but if you don’t have a good team, you will fail.
What components make up a great founding team? A set of people who are realistic and honest, work well together, and have a passion for doing something great. A team made up of “A” people who will hire the right individuals to make the company a success. A team that VCs can see has the right stuff to make it work, since this is one of the first thing that most VCs look at.
Does this mean that the founding team of a start-up needs to have its entire executive staff in place at their first meeting? No. But the team needs to be realistic and honest. They need to be honest with the other founders about their vision for where the company is going and what role they want to play. If everyone has a different vision and these different visions are not discussed, you will run into problems right from the beginning.
The founding team members also need to be realistic about where they will fit in at this new company and that their roles will change with time. The start-up probably doesn’t need three CTOs or two CEOs. Nor does the start-up need a CEO who doesn’t have the skills and abilities needed to successfully run the company. A new company that has a CEO who knows that someone with more experience and know-how should be brought in at the right time, and who is willing to take on different roles in the growing company when that time comes, is a great asset.
A team with the right chemistry will make it through difficult times, while lesser teams will crumble under the pressure. The founders of a company may be spending a lot of time together over the next few years, so they will want to make sure that they get along. Also, they will need to try to look ahead and determine how they will work together under the stressful situations that will come. Lastly, they need to make sure the group has a sense of humor. Spending a lot of time with a dreary group isn’t very much fun.
The founders also need a balance of passion and experience. All passion with no ability will just create a lot of heat with no product. All experience with no passion creates a company that, if it survives, moves like a sloth. A balance between these two aspects is needed to make a successful company. Many new startups contain a founding team with great technical ability. These startups can succeed if they realize their technical focus and bring on people with the experience and business skills needed to start a successful company. A team that has all the bases covered has a great chance in succeeding.
The founding team should also be made up of “A” people, because as the saying goes, “A” people hire “A” people and “B” people hire “C” people. At the initial formation of the company, it is key to have a group in place that is going to grow a company made up of “A” people, so that the company can succeed.
Some of these fundamentals may seem obvious, but they are often glossed over or even ignored. Ultimately, the founders need to ask themselves the following: “Are these the people I want to spend the next 5-10 years working with?” “Are we all trying to achieve the same goal?” “Will these people be able to grow the company to achieve this goal?” And the hardest question of all: “Am I right for this company?” If you answer these questions honestly and come up with yes, yes, yes, and yes, then you are on your way towards forming a great company!
Parduhn is a graduate student in the Alfred P. Sloan School of Management, and serves as the lead organizer for the $50K entrepreneurship competition.