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Tuesday, April 17, 2007

The structure of your start up team

Your team should have a hard core of start up warriors, the guys and gals who will not give up,who love to design, build and sell services / products , this is an article that I have summarised from an original series by Richard Hathway he is a Chartered Engineer with many years experience in software development and several years with startups. Most recently he spent four years at Sendo the mobile phone manufacturer, having joined shortly after it was founded.
There is a common perception of a high-tech startup, the common view is that a startup consists of a highly driven ceo with The Vision who builds a two or three person management team, prepares a business plan, raises a bare minimum of venture capital and than hires a handful of employees. This small but dedicated group then boldly struggles to build The Great New Thing, whilst being paid mainly in stock options rather than real money. About two years later there is an ipo and everyone involved makes a fortune and retires to a desert island.

An alternative reality for some startups
The above may be in fact the planned life-cycle for many smaller high-tech startups – but some larger startups can be different. They have plenty of vc available from Day One. The staff are also very well paid – and also receive stock options or even real stock. At these larger startups the ceo and the management team own the bulk of the stock. Their role is strategic rather than hands-on. This team provide the vision for the company. Much of their work will be outward facing, involving funding, marketing, pr and so on. However the management team is no longer in a position to manage the product development in detail. The company now needs a three tier structure, namely: a management team, the employees ... and a core team sandwiched between these two extremes.

The core team
Most accounts of startups fail to highlight the nature of this core team. The core team members are not simply traditional line managers – they are the people who actively convert the founder's vision into a marketable product. The members of this team will be highly skilled and experienced specialists who provide the technical strategy, designs, plans, schedules, etc at the implementation level. The core team will also hire and manage a number of employees to support the product development.

Core team members will be extremely well paid and will received a decent amount of stock options and/or stock – but at nowhere near the level allocated to the management team. The employees in turn will be paid a little above industry average rates and may be offered relatively small stock option allocations.
Any ceo of a newly founded well funded startup should not expect to simply hire employees en masse to implement the planned product. He/she would be well advised to plan a core team as part of the initial business plan.

The most crucial core team members should be identified before the vc is obtained – this will allow them to be brought on board almost as soon as the company starts trading. This means that the founders must use their contacts and probably also a headhunter very early on in the creation of the company to locate the first core team members. All candidates at this level should be interviewed and hired by the ceo. The primary tasks of the initial members of this team” will be to set up the basic structure of the implementation side of the company and to sketch out a development plan with the other core team members. Once the basic framework is in place each core team member will hire suitable employees for their specific areas. The ceo should draw up a basic org chart as part of the business plan – but in real-life the core team will self-organise to optimise the skills and experience of its members. The team must be around 20% understaffed to prevent office politics, to save money, to minimise overlap and to maintain focus. The behaviour and attributes of core teams and their members can be remarkable – and yet there seems to be relatively little written about them.

Key attributes of “core team” members
They following seems to apply to “core team” members:
- They have in-depth experience in their key area.
- They have obtained their experience from several different companies an projects.
- They are passionate about their work.
- They can focus very intensely of what needs to be done.
- They want to make things happen – the word “can't” isn't in their vocabulary.
- They are happy to pursue the vision of the founder without attempting to improve it.
- They are intensely loyal to the founder, and not necessarily to the company or to the other members of the management team.
They are all full-timers – not part-time staff.
- None will be trainees – keenness cannot replace expertise.
- They are happy to work very long hours, 6 or 7 days a week.
- They have a huge amount of energy, drive and stamina.
- They are multi-skilled, and can provide useful support in areas outside their main focus.
- Many have been hired globally and multi-culturally – there won't be sufficient candidates locally.
- They are extroverts with a huge amount of self-confidence – perhaps tending towards arrogance.
- Even if primadonnas, they can control their egos in order to work as successful team players.
- They don't necessarily have degrees - many geniuses have no letters after their name.
- They have a varied dress sense – there might be a high iq powerhouse. beneath that kaftan or baked-bean splattered T-shirt. In fact a traditional business suit might be a warning sign.
- They have an innate ability to estimate project time-scales and resources.
- They can multitask between problems and projects.
- They are completer-finishers - they will leave no loose-ends in any task.
- They are not perfectionists – they know when to move on to the next task.
- They don't care about job titles.
- They can work equally happily with ceo level staff or junior staff, both inside and outside the company.
- They understand that the goal is to ship a product, not to play with technology.
- They are usually happy to travel extensively and to represent the company.
- They are not academics - although some certainly have the ability to be so.
- They complete their own tasks and they admit their own mistakes - and fix them. In turn, they accept other peoples mistakes - as long as they get fixed. A startup can't afford to waste time with cover-ups etc.
- They do not use the startup opportunity to pad their CV, to devise or acquire "silver bullets" or to introduce magic tools or methodologies.
- They accept that much of the product development work will be integration of existing technologies and not “blue sky” research or development.
- They fully understand the importance of time-to-market.
- They are capable of interviewing, hiring, assessing and possibly firing staff.
- They have some awareness of commercial issues.
- None will be sharply dressed individuals with smart haircuts who use “paradigm shift”, “quantum leap” and other management jargon.
- They recognise when – and when not – to follow international technology standards.
- They recognise when to use scalable solutions compatible with long-term corporate growth, and when to use fast “point” solutions in order to meet the time-scales.
- They accept that they may be at the company for anytime between 1 week and 4 years, but most probably for about 2 years. However they don't expect to still be there after 5 years.- They have a very “crisp” interpersonal style and will often scream at colleagues - but will then buy them a beer that evening. Conversely, if they are the one screamed at, they do not sulk overnight.
- They don't play office politics.
- They are perfectly happy with constant change.
- Many have lived or worked abroad for some time in their lives.
- Many are into exotic and extreme sports such as go-karting, rock climbing and caving.
- Many have run their own businesses at some point in their lives.
- They don't have the time and inclination to put up Dilbert cartoons.
- Their "significant other" understands that they will be away from family life. for most of the time for typically one to two years.
- They believe their health is up to the high workload.
- They are remarkably insensitive to stress.
- They "live to work" rather than "work to live".
- They are prepared for "burnout" - the workload and pace may simply be too much for them after a year or so, requiring them to move on, before the startup reaches ipo etc.

The expectations of “core team” members
- They expect the planned product or service to really have a significant chance of commercial success.
- They expect the company to have finance to cover the first 18-24 months.
- They expect to be paid well for their skill - typically around two to five times a "normal" salary plus stock and/or stock options.
- They don't expect, need or want a detailed job description - they will be happy doing whatever is needed: writing adverts, giving guided tours, clearing blocked toilets etc in addition to their main role.
- They expect that all secretarial and administrative staff have above average skills.
- They expect to be able claim certain tasks or features as “their own" and maintain ownership of these areas – without requiring management instruction or permission to do so.
- They expect under-performing employees to be removed very promptly.
- They expect to be fired very promptly if they do not perform.
- They expect an informal HR process – “control” by formal HR group will not be appreciated.
- They expect regular feedback from the ceo concerning the progress of the company - ideally through “Town Meeting” style events which allow questions to be posed to the ceo by the staff.
- They expect Machiavellian empire-builders and political animals to be chastised - and weeded out if required.
- They expect that any “group hires” from a single company are not permitted to set up a self-serving “clique” within the startup.
- They don't expect the stock options etc to allow then to retire. They understand that they will probably never benefit from them or that the financial rewards will be a lot less than you might have expected. Any real financial rewards will go to the founders and investors - and the probability that the startup will make any money for anyone is low.
- They will be unhappy about the hiring of “centralised” qa or documentation staff – initially this should be handled by team members.
- They expect to be given the best possible equipment for the task in hand.
- They do not expect the ceo or other founders to employ friends and family at any level in the company.
- They do not expect the ceo to “parachute in” expensive directors or senior managers during the project, especially if these isolate the ceo from the “core team”.
- They expect a “low friction” working environment eg a 100% reliable computer network, simple & rapid expenses processing etc.

The nature of the core team itself
From the above, core team members seem to have typical startup personality profiles. Such people can come across as being self-opinionated and arrogant. However what is less well known is how effective – and daunting - an integrated team made up of such personalities can be. A group of 10 or 20 high iq, highly driven, highly experienced people all working very long hours towards a common goal can sweep almost all obstacles aside. As a team member you can feel like a member of a military unit – or a “cult”. This can be exhilarating when you a member of such a team – but outsiders can find the attitude offensive and overbearing. This however is not regarded as an issue by team members because the intensity of this approach really does work: suppliers learn to deliver on time and with high quality whilst customers admire your focus and tenacity – or at least get worn down by the incessant pressure. Many people would say that they could not work for such a team which behaves in such a manner – however don't forget that the vc will only last a certain amount of time, so the startup staff simply cannot afford to be patient and polite at all times. Some might say that the core team consists of a gang of stormtroopers. That description may sometimes be close to the truth.
Please also give your prayers to the families of the murdered at Virgina Tech, yesterday (16th April 2007)

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