This post was written by CASE Executive-in-Residence and Sproxil Co-Founder Alden Zecha. He has over 25 years of experience in more than 35 countries and has founded several companies, including SEAD Innovator Sproxil, Inc., a social venture that provides a consumer SMS and app product verification service to help consumers avoid purchasing counterfeit products, and We Scale Impact, a consulting firm that specializes in global health ventures.
Founding a startup is hard. It takes determination, perseverance, a lot of work and a diverse set of skills – business strategy, people management, finance acumen, and technical and operational expertise. That’s why most successful businesses have founding teams and not solo founders. Even companies that we think of as having a solo founder, such as Apple, Microsoft, Tesla and Facebook, all had founding teams, though later a single founder became the dominant face of each company.
But what makes for a successful founding team? How can you know if a team will be successful? There are never any guarantees of course, but in my experience as a serial entrepreneur, mentor and angel investor I’ve seen four common themes that increase a founding teams’ likelihood of success. These attributes help teams to move through setbacks and take advantage of opportunities.
One attribute that most founding teams have is commonality, meaning that they come from a similar background or educational institution, they share a common passion, and possibly comparable skills. None of those is bad but the strongest teams also have diversity, especially in their skill sets.
Most successful teams have at least one technical expert and one business person. When I say technical, I don’t exclusively mean IT or scientific expertise but rather expertise in the core knowledge behind the service or product that the company will offer. This could be medical or scientific but it also might be fashion, farming, or retails operations. Having the combination of both technical and business expertise helps a venture to balance what it is doing with how it is doing it. In the social enterprise context, this sometimes means balancing passion with pragmatism.
- Corporate Culture
People often talk about a company’s culture being a key reason for someone to join or not join it. That culture is set early on by the founding team and is the second key attribute for success. The type of culture itself doesn’t determine success – there are many successful enterprises with widely varying cultures – but it is critical that the founders all share the same work approach which sets the tone for the company culture.
Whether everyone thinks the approach should be personal time as completely private, work hard/play hard, family friendly, etc., it doesn’t matter so long as the founding team is all on the same page. If the founders can’t agree on that seed of a company culture, then the culture will likely flounder, leading to significant issues in the future.
- Cultivating Teamwork
Third, founding teams are just that – a team. They won’t be as successful functioning as a group of individuals. To work well as a group there are two related attributes that are key – mutual support and respect.
Just as in sports, when one player on a business team isn’t performing well, the other members need to help support that person and cover their responsibilities until the first can be back on his/her feet again. No one is a star performer every single day and everyone is a star some of the days. Finding ways to mutually support each other helps everyone move the enterprise forward. To do that also requires mutual respect. If you don’t respect your teammates, then you likely won’t feel comfortable that they will be able to support you when you need it. They don’t have to be your best friends but you do need to respect their capabilities.
- Clear Decision Making Methods
Finally, successful founding teams have clear methods of making decisions. Whether that is by consensus or by fiat, all members should understand how decisions will be made and by whom.
Years ago when I was at ultra-luxury travel company PrivatSea, our CEO wanted to make most client-facing decisions while also wanting account managers to take control of their client relationships and make their own decisions. This could have worked if there were clear guidelines as to when account managers should act independently and when they should not. However the CEO’s arbitrary interventions led to confusion and frustration and ultimately led to staff turnover.
People need to clearly know how much autonomy they have and what types of decisions they can make without consulting others. This avoids wasting time to figure this out for each decision, worrying if a decision will encroach on another person’s responsibilities, or worse yet having the CEO yelling at them for not doing the right thing. Having clear lines of responsibility allows teams to be more productive.
Whether you are building a team or evaluating investing in a founding team – look for four key attributes to increase the probability of success: a balance of technical and business, work culture alignment, mutual support and respect, and clearly agreed decision rights. Ventures that have all four are much more likely to survive challenges and drive forward when they see an opportunity.