There is an on-going debate about the success indicators of  young start-ups. One camp says a good team and on “OK minus” Problem/Idea/Market is good enough to predict the success of the start-up while the other camp would say that if the team is OK and the problem they are tackling falls in a hot market is good enough.

As i mentioned before, I am definitely on the camp that says it’s all about the people. I also think that if you are starting in a market that everyone knows that is “hot”, it’s going to be a crowded ride.

So what does a good team look like?

The founding team has two parts, the founders and the first employees.

The ideal number of founders is usually 2 or 3, 1 is not enough since it lacks the sanity check that two independent minds bring to the table and 4 can be too much to break responsibility in the early days and leave enough equity to keep everyone motivated as the founders dilute their holdings in the company with more VC money coming in.

The founders along with the first 5-8 employees (or less if that is what you brought  on board for the first phase of the company’s life) are what you would call the founding team, my advice is always to stick with 1st degree of separation here and not hire anyone you don’t already know and better yet, stick with people  you have worked with before.

It’s good to let the founding team to work together for at least 6 months before expanding further, this creates a solid bond and allows the company culture to grow organically. This comes important as the company further grows and new people join, each of the founding team members is able to instill that culture onwards in a scalable way. The stability of the founding team is crucial, things will get hard and the damage to the company of an early member of the team leaving can be devastating both in the form of morale as well as unique knowledge that disappears.

The team is always more important than any individual ingeniousness, as a species, human have a unique trait that the power of a group is more important for the success of its members than individual capabilities (a trait shared with Dolphins and Apes that practice coordinated attacks in groups). the longer the team has been together, the better they will perform given the exist knowledge and trust between the members. a lot of people might argue this to the point of saying that trust is more important than abilities for early new members of a founding team.

There are two common ways to set the direction of the team, you either start from the solution or you start from the problem. when starting with the solution you might have a concept of something cool that someone needs but you can’t really articulate the who, why and when they would pay for it  and most probably, the problem you will end up solving will be very different than what you had in mind when you started. when starting from a problem you know of a hole that needs or will need  to be filled and you have some idea about how you would start building the solution but most chances you will discover the biggest challenges from the technology side after you started implementing the solution.

Between the two options it seems like younger entrepreneurs embarking on less expensive endeavors would go for the first while the latter is usually the course chosen by more experienced entrepreneurs but both work only if the team is able to keep a plan while maintaining an open mind to the changing environment around them.

More on tuning the problem you are aiming to solve in the next post.