Team Building: Ideas to Keep in Mind

“There is no I in TEAM.” – attribution unknown

The importance of a management team to the success of any venture is a well-known business fact. I have blogged about this in the past and it has been the key focal point of investors for years. So given the fact that no man is an island and one needs a team to succeed, a great question for an early stage entrepreneur is where do you start?

I have had the chance to build a number of successful teams in my career but more importantly, I have watched some truly accomplished entrepreneurs build them on a greater scale and with much better results. So when I reflect on what seemed to work for all of us, I kept coming back to five ideas I would suggest you keep in mind as you start the most important task you have as a leader – – building the right team:

1. Think leaders and creators. One of my favorite clients would often remark that an idea of mine was “counterintuitive” and that is what you might be thinking here. You may feel that you are the leader, so maybe these traits are not as important for team members. The point is most businesses successfully build to scale by having a series of teams who use their creative capabilities to solve problems. If you need any proof of that, just read about NASA and the race to land on the moon.

2. Look for the same culture but different skill sets. My advice is culture trumps economics every time. So if you want to build a real team, make sure your key members share a common culture – that comfortable work environment, transparency and a sense of what is right and what is wrong that can overcome the absence of short-term financial rewards.

3. Those who share your vision are good; those that share your passion are great. I have mentioned in the past my client who used the phrase “I always admired a man who can stand up and say, you said it chief.” Everyone will see through someone who is a blind supporter of your vision or worse yet, overly passionate about it. Do not force this; spend the time to make sure each key team member is on the same page. I would prefer serious and dedicated strong silent support over the shallow cheerleader any day.

4. Seek those who seek challenges. The shortest and easiest road is not always the best. The odds of having to pivot at least once along the way is high and that means change, and change is a challenge many do not like to face. While being supportive is important, it is better to have members on the team who have the inner strength to help correct the ship versus fight a required change in direction.

5. Share the pie. How you do this is up to you. Whether you choose to reward every team member (I call it the chicken in every pot approach) or those leaders and drivers having the most impact, make sure you think of and reward those most responsible for helping you on your journey.

So there they are – – hopefully, some helpful ideas you can use as you build your team. And please try to avoid that self-centered promoting type even if they have a skill set that you need. That person never gets the point that there is no I in team.

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Teamwork – No Successful Entrepreneur Should Leave Home Without It

“We got the tools; we got the talent.” – Winston Zeddemore from Ghostbusters

I am often asked what makes one company more successful than another.  Many think it is the uniqueness of the product or the ability to obtain financing that results in success.  I am going to draw upon three decades of comments and discussions with Venture Capitalists to help form my point of view.

It was the early 1980’s and I was at Arthur Young.  We had started to focus on high technology startups and, in fact, our San Jose office had been formed to focus solely on this market (Apple and Genentech were early clients.)  We had a national meeting of about 70 people – including a group that probably represented a majority the Venture Capitalists in the country.  One of the partners from Welsh Carson was doing a presentation and we were all anxious to learn how this very successful firm selected the best technology prospects in the world.  The Partner said that was easy.  The first 5 things they looked at were management, management, management, management and management.  Pretty clear message.

In the 1990’s I had a chance to attend some sessions with the brilliant strategist, Brian Quinn, from Dartmouth as part of the Tuck Executive Program.  We were discussing successful strategies in what was (and always is) an ever-changing world.  Brian consulted with many VC’s and, based upon his experience, had one key piece of advice; without a successful management team, most strategies were doomed to execution failure.

A few weeks ago, I was at one of our favorite spots, the ER Accelerator in New York.  I was talking with the team there regarding their selection of participants for the upcoming session they sponsor.  So, what was their focus?  It was simple; a solid team and a fair product trumps a good product and a fair team every time.

Growing and maintaining a successful company requires a good team; that is obvious.  As the leader, the burden is on you to recruit the right people and, more importantly, to not allow a true non-performer to remain because it is too difficult to part with a friend.  So, a few ideas to consider:

  1. Never be afraid to hire someone onto the team who is smarter than you (or the other team members.) There is something to be said for having the best athlete on your side.
  2. Chemistry rules but conformity is destructive.  Don’t avoid having someone on the team just because they may not be like the rest of you.  I counsel with a number of very talented individuals who, at times, do not maximize their contribution because they feel they are left-handed people in a right-handed world.
  3. Get input from junior team members on selection.  I have had the chance to be the one in charge and have rarely hired a person when my administrative assistant or a junior staff member felt it was not a good fit.  That unfiltered view can be extremely valuable.

Recruiting the right team members is one of the most important contributions a leader makes.  Keeping the team motivated and working as one unit (once they join) is probably a close second.  Spend the time on these important tasks and have the patience to develop your team so you can help ensure your company will be a success.

Startup Funding Myths

Dr. Thorndike: “Do you really think that is nece…”

Professor Lilloman: “Don’t tell me what’s nece…. I’ll tell you what’s nece..”

Script from High Anxiety by Mel Brooks

So why the arcane quote? In this scene from one of my favorite Brook’s films, Dr. Richard Thorndike is being told by his mentor, an old psychology professor that he (Richard) needs psychoanalysis. Richard does not even get the chance to complete his question about if it is necessary; he is stopped in mid-word. His mentor tells Richard (again with a partial word) that he will tell him what is necessary.

The parallel for me is the guidance I constantly hear at MeetUps and other gatherings that those “in the know” give to startups regarding achieving success with funding sources. The common theme to me is these so called “advisors” never listen to the startup. Many just dive right in with their advice and while some of it is good, some just seems to perpetuate what I think are myths. It is the same phenomena we hear as tax advisors when clients call about some great tax saving gimmick they learned about on a golf course. Raising capital is an intense process requiring serious dialogue, so let me try to debunk or perhaps clarify five of the more egregious myths I hear:

  • You don’t need revenue – while this is true for very early start up funding, you do need a revenue model and a “path” to revenue. At some point, you have to show that investor money will eventually lead to a “salable product or service” and revenue will commence. Without that, you are going down a very long road.
  • You need an introduction from a trusted advisor – this is false. While an introduction from someone known to the funding source is helpful, it is more important to make sure when approaching a funding source that the stage of development they seek and the space they like match with you. A venture capitalist interested in emerging growth medical device plays is not the right source for an “ed tech” company seeking seed financing regardless of who introduces you.
  • You can build the team later – while true as to a full team, investors want to see more than one person dedicated to the Company vision – – how do you operate together, how do your skillsets match your business model. If it is just you and an organization chart with boxes that contain TBD, you are not going to make it.

You do not need a business model; just a product or concept – false. As the late Jeff Timmons would say “an entrepreneur knows the difference between an idea and an opportunity.” Business models validate opportunities.

You can use funding meetings to practice your pitch – false. I think the idea of getting before as many investors as possible for a true “funding pitch” is not the way to go. There are friends, professional advisors, pitch competitions and a dozen other venues to practice your pitch. A funding meeting is the real game – – not a warmup and you should treat it accordingly.

We have watched our entrepreneurial friends waste endless hours in the pursuit of funding. Some blindly follow all of this “advice” and have minimal success. Hopefully, by delving behind these myths, I can help shorten your journey.

Your Dream Deal Team

“We have the tools, and we have the talent.” Winston Zeddemore – (quote from Ghostbusters)

You have decided it is time to sell your business and you hear that you should have a deal team.  So, “who you gonna’ call?” Do you think you can do it on your own or should you get help?  Here is some practical advice.

I am going to suggest a solid deal team.  However, please understand that the size of the transaction is going to determine what the team will look like. At this point, do not look at the individual players but the roles that have to be played.  I have seen smaller deals done with just a good transaction lawyer and an accountant.  But, before you go there, think of these roles:

  • Investment banker – they are the “broker” in the deal and simply put, if you wouldn’t sell your house without a broker, why wouldn’t you have this role in the sale of your business?  There may be “ugly” points that both sides have to make – having a pro as an intermediary really helps.  One who knows your industry can be critical in lining up the right buyer.
  • Lawyer – here there are two roles.  The “transaction” lawyer who understands how deals are structured and the “estate” lawyer who will help make sure you get maximum capital preservation / tax efficiency for the next generation.
  • Accountant – tax and deal structure as well as a trusted advisor who can help you quarterback the process.  And keep in mind, it is a process. You also need someone to guide you on the due diligence the purchaser will want to perform. Trust me; the bigger the check, the more questions they will ask (see my blog on the Spanish Inquisition)
  • Decision maker(s) – you need some governance around who is going to make the call when critical milestones come up.  Concluding on the Letter of Intent (LOI), due diligence requests, negotiating offers.  Put some governance in place before you start the process as decisions in this process are often time sensitive and usually emotional.  Better to set this process when the cooler heads prevail.
  • Financial advisor – someone to guide you on how to invest what you get from the deal.  Keep in mind, if you are an entrepreneur, you are probably used to being in control of your economic freedom. You can raise prices, trim staff or do what you have to do to run your business. You are nothing but a minority player in the investment world and you need an advisor who can help you understand what this means.

You will need to spend some money and good deal professionals can also help you manage this spend.  There are so many data points to consider; valuations, audits, stay bonuses, reward programs for key employees, etc. that it can be a bit overwhelming.  So make sure you get the tools and the talent and your chances for a successful deal will be greatly enhanced.  And keep in mind as Yogi says; “it will be over when it is over.” Good luck.