How important is having a “big idea” for startups? Ideas can generate a lot of buzz and capture attention from investors and potential customers, but long-term success really depends on the capabilities of the team.
It’s often said that investors typically look for an “A” team with a “B” idea rather than a “B” team with an “A” idea. The reason is that once you start developing an idea, things change, models need to pivot, and teams must be able to adapt. This makes a lot of sense because if all you have is an A idea and hit an obstacle, the venture fails. However, an A team can iterate until it finds success.
It’s easy to find examples of companies that started out with decent ideas, but their ultimate success was based on the team’s ability to be resilient and pivot. Zappos started out playing the role of the middleman. Rather than spending a lot of time and money on inventory and a fancy website, it simply put a few photos of shoes online to test the market. Over time, the Zappos team found that the key to encouraging people to buy shoes online was the free return. Because they were resilient, they were able to build on this strength to become a popular online retailer. Had buying shoes online not caught on, the team likely would have pivoted and tried something else.
Other examples include Amazon, which began with the idea to sell books online and evolved through the years to basically sell everything. FedEx began with the notion to deliver a package overnight, and Uber started with the simple idea of providing on-demand transportation. None of these were necessarily “big ideas” at first, but the teams adapted and grew to become major successes.
Only a good team can make this happen. When thinking about the team, there are several factors that founders need to consider. Here is a checklist to keep in mind:
Building A Core Team
How do you build a good core team? A big part of it is vision. The founder’s idea has to be good enough to serve as a lure for talent. Another part is the ability of the founder to recognize his or her own strengths and weaknesses—and to find complementary skills in team members. It’s also helpful to hire people who have done this before and made mistakes. They could be seasoned with years of experience or young and energetic, or a combination of both.
The Company You Keep
In addition to a core team, founders also need to build a strong external team, from advisors and partners to board members. After all, you are known by the company you keep. For instance, if a startup can convince a leading law firm or industry expert to advise the venture, that provides credibility, not to mention great insights.
Staffing Up
Once the core team is in place, startups need to be careful about growing too fast too soon. A common pitfall is recruiting a team of great players after receiving funding, only to find that consumers have grown tired of the idea. It’s like putting together a football team and then realizing that what you really need now is a basketball team. When this happens, the startup often has two choices: get rid of the team, or convert them to the other model and hope they are good at basketball. This tends to burn a lot of money and turns the company’s focus inward to deal with people issues, blurring what should be the company’s laser focus on customers.
A third (and better) option is to only build the bigger team just in time for testing out your market. When you find the right product market fit, that’s when you start hiring, so that you know the skills required. To do this, entrepreneurs need a good network so they can tap the right people when the time is right.
Who To Hire
When looking at potential new hires, I’ve found that there are seven characteristics of highly effective entrepreneurial employees:
1. Ability to deal with risk. Can they deal with uncertainty?
2. Results oriented. Can they take ownership to get tasks done?
3. High energy. Are they enthusiastic and fully committed to the venture?
4. Growth potential. Will they be able to take on increasingly higher levels of responsibility?
5. Team player. Can they contribute to the overall efforts of the startup?
6. Ability to multitask. Are they flexible enough to accept new duties, assignments, and responsibilities?
7. Improvement oriented. Are they willing to challenge existing procedures and systems in a constructive way?
While every company will answer the questions raised in this checklist differently, it’s critical to go through the process to ensure that the right team is in place at the right time.
