One of the entrepreneur challenges posed at the 9Others dinner on 16 July concerned bringing someone into the founding Startup team. Not sure I had many ideas on the night to now about how best to do this but it did get me thinking about teams. The theory supports this view as well. Professor Jason Greenberg from NYU Stern concludes that 65% of Startup failures are due to team issues rather than product or market failure. I have already written a couple of times about the importance of teams when making a Startup investment decision and I think this is true for the vast majority of investors. So what makes a good Startup team?
Teams need leadership. This doesn’t mean someone has to be “in charge” but for any task there needs to be direction and ambition. Leadership also means followership. Whoever is providing the direction, the others need to follow for that moment or that idea. Note one other basic fact. In a one person team there can be no leaders by definition.
Whatever the number it will be a very small group so chemistry between the individuals is essential. You can checklist the skills required but how they combine is an art not a science. A past history of working together (and not trying to kill each other!) is the only reliable indicator but may not be possible. One other thing I look out for is inclusiveness. If everyone’s ideas are not valued highly then the group probably isn’t working. It is also crazy. If you only have three people, leaving someone out is a pretty spectacular waste of resources.
Logically you might think that a passion for the business would also be a good sign of an effective team. Certainly passion is required and heart on the sleeve passion is often the most welcome sense from any Startup pitch. However, just because everyone is passionate does not mean that they can harness those passions together so be careful not to rely on just this.
Of equal importance with passion is commitment. Any great Startup is a long tough haul. A failing Startup is even harder. The core founding team needs to be on board for the duration. One tough aspect of this can be the way equity is shared in the business. There is no right answer to the value of each individual and it is very much a choice for the team. As an investor though I will look to be confident that all of the founders are motivated by their share.
Mind the gap
This is a pretty tough list and it could be much longer. One article I found in researching this piece offered 101 tips for building a Startup team! Bear in mind that in every team there will be gaps. In fact I actively look for gaps. A team with no gaps is either trying to kid me or is just kidding themselves. Deceiving yourself about weaknesses is one of the worst mistakes you can make.
There is one last thing that overrides all the others and is the one gap that can’t be covered. Action. It is easy to create a group of friends. A successful business team is much more than friends and so much harder to build. The Startup team needs to do things, not necessarily fast, not always right, sometimes not even well but there is no progress without action.
“Its hard to beat a person who never gives up.” - Babe Ruth
Startups are a great learning environment
What a great first week back from holiday! Sun shining, lots of Startup activity and some great discussions. Too much to detail everything but I guess I have one key takeaway from the week. Learn, learn, learn. One of the best things about getting involved in the Startup scene in Scotland has been the chance to spend time with people who are brimming with ideas, full of passion and very talented. As a result I am always learning, always being exposed to new ways of doing things and constantly being challenged by fresh perspectives.
Two prime examples this week, both on Wednesday as it happens. I spent the afternoon with two companies, Mallzee and Appointedd. Both have ambitious and exciting plans for growth over the next few months. I had two separate meetings covering the business strategies, the opportunities and plans for a whole range of activities to make things happen. Look out for plenty of good news from both sources in the weeks ahead.
In the evening, I attended the first 9Others dinner to be held in Edinburgh, arriving late because I was so engrossed in my earlier discussions. 9Others is a network of entrepreneurs started in London in 2011. The idea is simple, to bring a group together for an informal dinner and give everyone the chance to meet each other and share a personal challenge. The group then shares ideas about responding to that challenge and hopefully each person learns something from the evening.
I can certainly vouch for the effectiveness of the format last week. It was a great opportunity to meet a bunch of people I didn’t know (I had only met one of the attendees before) and the variety of challenges and responses was highly stimulating. Thanks to Tadas Labudis for organising and looking forward to the next one.
All in all a great week and gave me so much to think about. A few other highlights from around Scotland;
Massive congratulations to Lee McGlaughlin and the team at IC Mobile Lab for winning the Glasgow 2014 Digital Sprint competition.Can’t wait to see those augmented reality graphics round the city - bet they look better than the haircut Lee was showing off on Wednesday!
Always good to remember these are real businesses as well. Brewdog held their AGM this week and in keeping with the brand, the video that goes with it is a cracker.
Love the new look of the 360 Strategy website…..
….and also the makeover that Appointedd have given their microsite product
I also think this Open Innovation Masterclass looks like an excellent opportunity for some budding entrepreneurs.
Don’t forget to check OpenTechCalendar for forthcoming events and meet ups
And finally, not exactly Startup but the PopUp Scotland show featuring the best of Scotland’s Art School graduate shows should be a top source of creative inspiration, running until 2 August.
While you were away.....
Sun, sea, some great reads, running in the heat, did I miss the Startup world? Well I did give it a lot of thought which will hopefully bear fruit in the coming months. I don't think I am alone in finding that my real question when I return from holiday is more practical. Not the existential did I miss it but what did I miss? I have been keeping track of Scottish Tech Startup people and events for a year now. Frequent meet ups, great events, open conversations and lots of coffees have fuelled this interest. Since none of these are available in Majorca, I have turned to Twitter to check out events in my absence. Using my own list and with thanks to Tadas Labudis @Labudis for his well curated list, here are the highlights of the last week or so:
Exciting news of a great collaboration between Desk Union and RBS to provide a new flexible workspace for entrepreneurs
Interesting slideshow from a talk by Nooq founder Graeme Bodys about transparency
Can't keep my investment company Mallzee out of the news either. They were named in top 20 fashion Startups by tech.eu and you can also vote for them as a fans favourite in the Great British Startup Cup - will Cally withdraw if Scotland votes Yes?
A more serious competition from BoS. Not long left to enter their enterprise awards - deadline is 23 July and valuable support is on offer for the winners
Also serious competition, great to see two strong Scottish Companies in this contest to win the right to supply John Lewis stores with their product
Not sure if I have the energy for the Wild Hearts WolfTrek event this year but it sounds great so maybe next year.....
.....and last but surely the most significant news apparently the team @floatapp is now big enough for a game of ultimate frisbee!
9Others is a fun dining format bringing together players in the Startup ecosystem. Tadas has also organised (and kindly invited me to) the first such event in Scotland on 16 July. Places still available....
Ambitious Startup We Are The Future is hosting its first event stateside with the World Entrepreneurship Summit in San Francisco on 26 July. Even more exciting six early stage Scottish Startups won an expenses paid trip to pitch at the event in a contest at RBS HQ
The next Dunning Communications Breakfast focused on the value of Brand Culture is on 7 August
Quite a few meetups and other get togethers still happening and Open Tech Calendar has a neat and easy summary of the next few events now on its homepage
A few very significant external announcements I could have missed without the Twitter as well. First and foremost, the arrival of Google Ventures in Europe with a $100 million fund is fantastic for the whole Startup ecosystem
More local but also great news, Glasgow has become the first city in Scotland to offer free public WiFi
Somewhat arcane but vital to all our futures the Scottish Government's strategic plan for collection and use of data across public services.
Pretty lively for the holiday season I must say. Please let me know about anything I have missed .
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.