Often, startups follow the path of least resistance when creating their management team rather than focusing on building a high-performing startup team. Of course, it’s human nature to lean toward the known quantity—the guy next door, an office mate, a lab partner, or a former colleague. But these people are not necessarily the best fit for your startup.
In my experience, the most compelling startups pursue a more systematic approach:
- They first identify their needs.
- Then they develop a strategy for fulfilling each need, while utilizing their networks to identify candidates.
- Of these, they carefully try to select the most qualified candidates.
When Building a High-Performing Startup Team Start Here
The above systematic approach works because they identify their needs. Depending on the startup’s situation, there are two fundamentally different approaches to building a high-performing startup team.
Below are four questions to help get your startup on the appropriate path.
- Does my startup need to invest significantly in a plant or equipment in the first 24 months?
- Could a small team develop the product( or a beta product) in less than 18 months?
- How much time is needed to develop the product? What team is needed? What skills?
- Does my startup have a fundable CEO?
Adapting These Questions to Your Situation
If you answered, “Yes”, to question one, you probably need to raise some capital initially.
In this case, the focus turns to question four. If you have a fundable CEO, then by all means, launch a fundraising campaign. Otherwise, you need to do something about the CEO issue.
Here are some options:
- Recruit a qualified and fundable CEO.
- Find a senior advisor who can serve as a bridge to a CEO.
- Tell potential investors you will work with them to recruit a CEO once you have funding.
Where I Have Seen This Approach Work
Some semiconductor companies in my portfolio, like Sierra Semiconductor and Micro-Linear, needed significant capital up-front for needed manufacturing facilities. Wisely, they recruited strong C-level managers to justify the substantial up-front investment. They understood the importance of building a high-performing startup team and it paid off.
If your answer to question one is “No”, move to question two.
Building a High-Performing Startup Team Before Hiring a CEO Can Work
Suppose a small team could build your initial product. In that case, you might be able to use your company’s stock to recruit an initial implementation team and create an initial product or a beta version that you can install at some customer sites.
One of my favorite examples of this strategy is LiveSafe, a company that used stock to create a small implementation team, created its initial product, obtained a few customers, and got some outstanding national publicity before bringing in its first experienced CEO. This approach has the advantage of allowing startup founders to demonstrate their CEO skills.
Sometimes, first-time founders can create an implementation team, an initial product, and so much market success that they prove their ability to manage effectively and achieve their stated objectives. Creating a product at the outset can be a startup’s “best of all worlds.”
The Top-Down vs the Bottom-Up Approach: Which Will Work for Your Startup?
- A top-down approach in which the startup CEO recruits a C-level team to raise initial capital. Then, the startup hires the implementation team to create the product.
- A bottom-up approach in which the startup uses its stock to create an implementation team that creates the initial product. Then, the startup adds the C-level managers.
Some startups make the mistake of hiring C-level managers when they don’t need to. C-level managers are expensive. They usually need salaries and offices, which forces the company to raise capital before it has a product. So, if a company is capable of building a high-performing startup team bottom-up and producing a product before approaching investors, this is usually a better choice. It can remove significant risk for investors.
Regardless of the teambuilding sequence, one of the most effective things you can do to build a high-performing startup team is to initially create your own internal pitch deck.
Create a Foundational Pitch Deck That Adapts as You Grow
I spend a lot of time advising companies about building their pitch deck, and my advice always starts with: Create your startup’s internal pitch deck as a vehicle for making sure all participants are on the same page.
The best thing about an internal pitch deck is that it follows the same outline as an investor pitch deck. It simply deals with more issues and addresses them in greater detail than an investor pitch deck.
Tip: PowerPoint is a great tool for creating your internal pitch deck because of the bullet format and the ease of resequencing slides when needed. Your internal pitch deck guarantees effective internal communication. At the appropriate time, the company can convert it to an investor pitch deck that focuses on key investor issues in a more presentable format.
You can read more about investor pitch decks in my post on the topic here.
When Building Your High-Performance Startup Team, Pay Careful Attention to These Factors
- Recruit individuals that complement any weaknesses you or your CEO have
- Pay special attention to finding a marketing and sales professional that will be effective in introducing and marketing your product
- As you expand your team, make sure the existing members are comfortable with the new ones
- Remember, your goal is to create a team that can work together effectively
Follow these suggestions, and you will be off to a good start in creating your company’s high performing startup team.
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