Assembling the Right Team
I meet with a lot of startup founders, and many of them don't have well-balanced teams. For example, a company might have two non-technical cofounders who are outsourcing all of their early engineering work, or two technical cofounders who want to build enterprise SaaS products but have no sales experience and no connections to their target market.
These imbalances might exist because the founders prioritized working with trusted friends over better qualified acquaintances, or because they paired up based on who was between jobs rather than who was the right partner, or one of many other reasons. Regardless of the underlying cause, team imbalances hurt companies in the long run. The right team can make a company while the wrong team will break it -- often before the company even gets off the ground.
Who's on the team?
The team is not just the founders, it also includes employees, contractors, investors, and advisors. Each of these groups has different trade-offs. For example, advisors can often help at a strategic level but rarely help with implementation. In contrast, contractors can help you build a specific feature but won't be helpful when it comes to deciding which features to build.
What areas need to be covered?
The utility that each teammate provides might include:
- Introductions to potential customers, potential employees, potential investors, journalists, influencers, domain experts, etc.
- Vertical domain expertise (i.e. experience building related companies within your vertical).
- Horizontal domain expertise (i.e. experience building your product in other verticals).
- Help defining company strategy.
- Help with management.
- Help with execution and implementation.
Investors and advisors can usually help with a subset of #1-#4. Contractors help with #6. Most full-time employees will be focused on #5 and #6 while founders are focused on #4 and #5.
Tips for assembling teams
I think the best way to assemble a team is to pick off your weaknesses one by one until you don't have any weaknesses left. The key is to figure out what your most pressing, most addressable needs are, and then to find people who are strong in those areas. As your company matures, you can start bringing people on more opportunistically, so that you're prepared for anticipated challenges and not just immediate ones.
Here are some other tips for assembling a team:
- Don't hire people unless they can really help. "Ah, we need some credibility on the engineering side, so let's give 0.25% equity to a famous engineer who won't really have time to work with us. We can put their photo in our pitch deck!!1!" That's a bad use of equity. It's way better to take that 0.25% and give it to someone who is less well-known but more hands on, or to sweeten the compensation package for an engineer who's deciding between your startup and Google.
- Don't be greedy with compensation when you find the right people. Sure, giving an advisor 0.25% equity for 20-30 hours of total work sounds steep, but would you rather have 100% of a company that requires 8 months to build an MVP, or 99.75% of a company that can build an MVP in 6 months because the advisor can guide you in the right direction?
- Look for people who complement your existing team because they are strong in areas where you are weak. If you're an awesome data scientist with no management or sales experience, then look for a cofounder with management and sales experience, not another data science cofounder.
- Look for people who address a pressing need. If you plan to build your sales team in 12 months, you probably don't need to hire a VP of sales right now. On the other hand, if you're an engineer-turned-CEO and you're reaching the peak of your ability to sell, then looking for someone to take sales to the next level is a great idea.
My final tip is to ask investors and/or other founders about how they would expand your team. These people are more experienced at seeing through the facades of star-studded advisory boards and name-brand engineering consultancies, and they will give you an honest opinion about which gaps to fill and how to fill them.