‘Investors invest in teams and not in the idea’ is a cliché. That does not mean it is untrue.
What is worth discussing is this:
What does a winning startup team look like?
Winning Teams are Diverse
Will you create a cricket team with only batsmen in it? Imagine a football team which has all the best strikers in the world but no specialist defenders? In his book ‘Startup seed funding for the rest of us’, Mike Belsito says
“… because people naturally gravitate towards others who share common interests and, generally, are similar to them, this group of friends is probably composed of like-minded people. This can be a great circle of friends, but surrounding yourself with people similar to you can be a fatal mistake in a startup.”
Winning Teams have a Chemistry between them
In ‘9 Reasons Why Most Startups Fail’, Steve Tobak says, “Some founders just can’t get along. Others fall apart when the initial strategy fails, as it often does.” The business might not happen the way you planned. You will have to pivot and change tactics. At that stage, the founder’s interpersonal chemistry will matter. In another survey of 101 startups by CB Insights, the No. 3 reason for startup failure was “Not the Right Team”. It was just behind “No Market Need” and “Run Out of Cash”. If the market does exist and you have the cash to run your business, then you know what can sabotage the game; your team. Build your team wisely.
Winning Teams have Horses for Courses
A startup is after all a business and as soon as it starts growing you will need various skill sets. In most startups today, we need a tech expert, a businessman, an operations and logistics expert and a sales and marketing guy. Look at your team and see if you have people who fit the bill. Divide roles based on interest and prior experience.
Winning Teams can Execute
Idea is not enough. Ideas come cheap. God lies in execution. Cliché but true. Most remarkable businesses today were not built on a unique idea. They were built on how the team executed the ideas. How they read the market and changed their offerings. How they learnt on the go and managed to deliver the experience they that hoped to.
When seasoned Silicon Valley investor Vinod Khosla talks about team he looks for a team which can mitigate the risks. How do you build a team that will execute what you talk about in your business plan? Take people who have executed something before. Either in their previous jobs or in a previous startup.
Winning Teams have Domain Knowledge
Imagine you want to launch a financial app but your work experience is in supply chain. Difficult! You can surely learn as you go, but having domain knowledge puts you in a higher gear from day one. Build a core team which has atleast one person who knows the game inside out. You can also appoint advisors (with domain expertise) who will play an active part and help you out with knowledge and contacts. Francisco S. Homem de Mello in his book ‘Hacking the Startup Investor Pitch says,
“Having a coder makes little or no difference in a biotech company (where much is done in a chemical lab), but it is absolutely necessary to have a scientist who knows his or her way around technologies and procedures that will be used in the development of the first product”.
Winning Teams have ‘Skin the in Game’
A winning team consists of people who treat this as their full time occupation. You can definitely develop your business and continue to hold a full time job. But when you start meeting investors this can go against you. Mike Belsito says,
“… you’re not likely to get funded if your startup is simply a side project you’re exploring while you maintain your full time job.”
What also matters here is, how much of your own money, in proportion to your stature in life, have you invested in the business. If you are not investing some of your own money, why ask the investor? No business is built on someone else’s money.
[About the author : Vivek Singh is the founder of Jazz Factory, a presentation design and consulting firm.]