I’ve written before about the importance of picking the right co-founder/s for your venture. I cannot overemphasize the importance of this decision. That’s the first step to building a great team. Next, you and your co-founders need to function as an effective team.
Based on my own experience, and the painful experience of other entrepreneurs, I believe there are four critical elements to a successful founding team.
Mutual trust. This is by far the most important element of any team. You and your partners need to have complete trust in each other. Otherwise, don’t even start your company.
Full Confidence in each other. This means confidence in each other’s skills and abilities to successfully perform your respective roles.
To move fast and achieve your goals you will each need to share the load of running your start-up; lead a certain discipline or task; make the appropriate decisions; work independently. In short, this means you need to be able to depend on each other. Otherwise, your team’s progress will be slow and you will miss your goals, which will lead to disappointment and frustration. Moreover, you will be perceived as a dysfunctional team by investors, partners, and your own people.
Shared vision and success goals. If your vision is to build a great and lasting company, while your co-founder is seeking a quick exit, you are likely to have significant disagreements in almost all aspects of running your company. For example, what’s the right business model, who are the right investors for your start-up, how to structure your organization, and more.
It’s best to establish a common vision and definition of success for your company early on in your work together. Don’t skip this important discussion, since it will come back to bite you.
Symmetric level of commitment. This topic is rarely talked about, and yet I believe it’s very critical for a healthy and positive team dynamics. An asymmetric level of commitment is when one of you is fully committed to the start-up, working full-time to move it forward, with minimal or no salary, while another partner is doing it part-time while still maintaining his daytime job, including full salary and benefits. This may seem harmless enough, or at worst a petty issue. Believe me, it’s not. Many start-ups failed due to this issue.
When one of you is risking everything, sacrificing her (and her family’s) quality of life, while her partner is taking no risk and sacrificing nothing, it’s a very real and personal issue. It can lead to conflicts in key decisions, such as fundraising, company formation, and equity distribution. It can poison the team atmosphere and cause resentment among its members. An asymmetric level of commitment can undermine all the other three critical elements above, starting with trust.
Therefore, ideally, all co-founders should commit to leaving their jobs and dedicating themselves to the start-up at the same time. In case one of the founders needs to stay in his current job a bit longer, either due to contractual or personal obligations, make sure there is a clear deadline after which he either joins the founding team full time or is taken off the founding team (will not be considered as a founder). Although this may cause some discomfort among the team, it’s better to deal with it sooner rather than later. Failing to do so might destroy your company.
A great founding team is by far the most important element to a successful start-up. More than a great idea or a brilliant business model. The best idea in the hands of a dysfunctional team will fail. Conversely, a great team can start with a bad idea and eventually arrive at the right business model.
There are many challenges and struggles to overcome when you’re building a new company. Be sure you’ve got the right team, with the right foundations, in order to improve your chances to succeed.
All the best!