Tetiana Horban, CEU iLab
July 10, 2020
It is estimated that 90% of startups fail. Why? According to the Failory report, this happens due to the incompetence of startup founders, lack of goods and industry experience, as well as limited team experience and personal problems. Moreover, a study found that team-related problems might be responsible for 60% of new ventures failures.
Basically, how well you build a team as a primary founder can define the future success of your entire startup. But how to do that? How to build a winning startup team that not only wouldn’t sink your project but would also yield stunning results?
In this guide, you will find out:
· What makes a successful startup team (Chapter 1)
· What to do before you set up a team (Chapter 2)
· When to partner and when to hire (Chapter 3)
· Who should join your team (Chapter 4)
· Where and how to search for startup team members (Chapter 5)
· What to avoid when creating a team (Chapter 6)
· How creating a startup team looks like in real life (Chapter 7)
Ready? Scroll down to find the answers to your questions!
Before we talk about how to create a successful startup team, let’s first define what this team actually is.
Not long ago Harvard Business Review published results of a study which answered this question. Generally, it might be assumed that if:
· team members had previously worked in other startups,
· they have good knowledge of a product,
· they possess necessary industry skills
then their fortune is made. However, a study on 95 new startup crews in the Netherlands shows that startup success depends not only on the hard skills of the team members. In fact, it is all about the balance of hard and soft skills.
Researchers define hard skills as team members experience while soft skills are about members’ passion and common vision. They found that while hard skills are important, they are not enough. They do enhance the crew’s resource pool and help identify better opportunities.
However, considerable experience of team members will lead to a greater performance only if they have the same vision and goals. That’s why when gathering a startup team, you will have to look not only for experienced and skillful members. You will have to search for people who share your vision and believe in the idea of your project.
What else makes a team successful?
There are two more things that will guarantee the success of your team – ability to work together and serve clients.
1. Even if team members share the same vision but if their communication skills are poor, if they aren’t willing to resolve conflicts, prioritize collaboration over their egos, nothing will work out.
2. Also, if team members are more focused on themselves or the work they do rather than on satisfying customers, the business will sink. Any entrepreneurship is meant for customers. Don’t have a startup for the sake of a startup but to serve people.
Keep all this in mind before and when you gather a team.
You can’t start gathering a stellar team from scratch if you omit this step – increasing self-awareness. What is it about?
Being self-aware means to:
· know your hard skills and objectively evaluate them (what are you good at? What do you lack?)
· understand your personality (are you an action taker or a strategic and conceptual thinker? Are you decisive or hesitant? etc.)
· know your goal and vision and how you would convince others to believe in them
Why is this important? Because the strength of your team starts from your strength, and your strength starts from your self-awareness. High self-awareness drives better team performance. It boosts decision-making, action coordination and conflict resolution.
Think about who you are, what you want to do and why before you leap onto the next stage – searching for co-founders.
It is an ever-lasting debate whether you need co-founder(s) or not. Many would say you do, but data shows – not necessarily. Most startups (over 50%) in fact have a single founder, while the average is 1.72 founders.
You can be a single founder and later on hire specialists to do the work for you. Or you can partner up with one or several co-founders and keep your team small until whenever you feel is right.
But what is better for you? How to know if you need a co-founder(s) or you can go alone? Find out below.
There’s nothing wrong in wanting to run your startup alone. There are high chances it will work out even like that. But if you have doubts and still not sure if you need co-founders, do this: identify what your business lacks, figure out what kind of skills you are missing. It might be a specific process, skills, connections, anything. If there’s such a gap, you need a co-founder(s).
For example, you’re working on a technological startup. You are very good at coding, but you still feel your skills are limited due to the lack of practice in the niche of your startup (let’s say, a gaming app). Do you need a co-founder? Absolutely! You need someone who would complement you and be as dedicated as you are in your business.
Intel founders Gordon Moore and Bob Noyce come from different backgrounds. The former studied Chemistry while the latter Physics, and only together they gave birth to one of the most known technology companies in the world. They complemented each other, and that’s why it worked out.
This is another dilemma that many young startup leaders face – is it better to distribute the roles between co-founders or employees/through outsourcing? At any moment you may need a lawyer, a graphic designer, marketing specialist, etc. So how to go about it?
Consider these three things:
1. Importance. Is the role essential for your startup? If yes, you need a founding partner. If not, you need to outsource or hire. For example, you're opening an online shop. Having someone on the team with technical expertise will be essential while designing the website you can outsource.
2. Dedication. Will an employee invest as much of their time and effort as a co-founder would when you think it’s important? If not, you need a dedicated co-founder. Someone who would not rely on the office hours but the inner drive and belief in the project, and someone who will be ready to make crucial decisions.
3. Time. If there are roles that you need fulfilled at early stages of your startup, but you aren’t ready to hire people or outsource (due to legal or financial issues), it’s better to have a co-founder(s). Later, when your startup has got its feet on the ground, you can start hiring (it may happen in half a year after you found it or in 2 years).
Remember, there is no standard rule that applies to every startup. It’s up to you, which path to choose – to go alone, find co-founders and how to distribute the roles. But if you choose the most optimal option, you will create a winning startup team.
Either you want to go alone or have a team of co-founder partners, you need to make sure these essential 6 roles are fulfilled. One person can fulfil several or all roles. If it’s you – then you can run a startup alone. If not – you need a stellar startup team.
It’s a person who sets the vision for the company. It’s someone who knows what the world will look like when they get your product or service. It’s someone who thinks in concepts and can produce ideas which fit your goal. They mustn’t necessarily know how to implement, but it’s their job to think about new projects within your startup and deliver ideas comprehensively to others.
Action taker, or operational leader, is someone who finds ways to implement things that the visionary is concerned about. It’s a person who is able to think strategically and is always practice-driven. Someone who knows how to respond to clients demands, as well as prevent issues before they take place. Action taker has a “get things done” attitude, is able to multitask and meet deadlines.
If your startup has more than one founder, you need a team leader. This person will be responsible for decision-making, consensus and compromise. Most likely, opinions within your team will divide, so you need someone decisive to run the democratic processes within your team. It must be a great communicator and conflict manager.
Your stellar startup team needs at least one person who knows everything about the product or service you are working on. The expert is knowledgeable about internal processes of product development. This person is result-driven and works on resolving issues that your clients face.
Many startups sink because they don’t find ways to promote and sell their products and services. The sales beast is one of the crucial roles in your startup if your aim is growth. This person knows the latest conversion tactics, aspires to greatness, is a perfect communicator and is not afraid to fail.
To succeed you need a person who knows how to manage cash flows, plan your budget and make financial predictions. It’s someone who isn’t afraid of myriads of numbers, who will not let you drown in debts and who will find ways for you to make more profits. Accounting skills and strategic thinking are a must for this role.
In brief, you need as diverse a pool of members as possible, as people who can think differently are capable of coping with challenges in unconventional ways. And, most importantly, they should be able to find the common ground with each other. It will be your job as a leader to find people who would find it pleasing to work in a team with each other.
What is the best way to search for team members, either they are co-founders or early employees? There’s no one-fit-all option, so consider this:
Personal networks are the best way for finding co-founders. Once you know what kind of actors you need in your team, start with someone you already know – a school buddy, a university fellow, a former colleague, a former business partner or simply a friend.
Usually, you know what kind of people those from your network are, you may have worked with them on some projects already, have mutual respect and trust. Talk to them and see if they buy your startup idea.
This approach will suit better for hiring your initial employees. You need to know the roles and responsibilities you need fulfilled, then hire for merit, talent and skills. Go to tradeshows and university career fairs, talk to people in various professional associations if you are a member of one, consider hiring someone from your co-founders’ previous projects/workplaces if they had one.
Tell them about your startup, ignite them, and hire those who are smarter than you because at the end of the day they will implement your ideas.
87% and 55% of recruiters use LinkedIn and Facebook respectively. Try them too if you want to hire people effectively. For this, you will need to spend quite a lot of time, as online recruiting requires constant communication. If this is not an option for you, consider the next one.
Hiring a recruiter will cost you money, but it is a great investment for two reasons. First, you will save your time and use it more effectively on the startup itself. Second, you will stop hiring wrong people. Professional recruiters know how and where to search for the best fitting people, and this is crucial for a startup which cannot afford to fail.
If you decide to look for team members on your own, do these three things:
1. During the interview, ask potential candidates about their background and how they coped with specific challenges at previous workplaces.
2. Give preference to problem solvers and people with a high level of resilience and persistence. Most startups fail, it’s not an easy thing to handle. You need fighters on your board.
3. Ask yourself: 1) Do they share your startup values and culture? 2) Do they possess the right skills for your startup? This is not only about hard skills. In fact, people can get trained easily, but you cannot change their attitude. So, it’s more about soft skills like having a pro-active, problem-solving and customer-satisfying mindset. If the answer to both these questions is yes, then you have detected the stars.
When getting people on board, you can make mistakes, especially when you’re inexperienced. Here are the don’ts of creating a startup team:
Talk-A-Bot is a Hungarian company, which creates integrated chatbots for enterprises like banks and insurance companies. It started as a student project. Ákos Deliága, one of Talk-A-Bot’s four founders, came up with the idea during his MBA at CEU.
In 2019, Talk-A-Bot graduated from CEU iLab and was awarded the Badge of Excellence as it collected over 570,000 euros revenue in one year and created 30+ jobs. Here’s how Ákos gathered a stellar team and how Talk-A-Bot grew from a student project to a growing startup.
Ákos told us that initially he had to present the project at one of the courses. He teamed up with some of his classmates. One of them was Gergely Kalydi, who later became the co-founder, responsible for operations.
I knew that we needed more co-founder partners. So, I was looking around in my network to see who else could be there. I'm an IT engineer by profession, but I'm more into business. I'm not really a technical co-founder. I knew that we needed a strong technical basis. Gergely is a technical co-founder, and I wanted to find one more with a different personality. So, I was looking for the right match in the personality.
This match was Tamás Szálka, who became the startup’s Chief Technology Officer, and with whom Ákos always wanted to have business together.
He [Tamás] had his own company with developers. We knew each other for years, through friends and personal network. And we were talking for years about doing some business together. We had this intention to work together beyond the friendship.
Talk-A-Bot had three people in a team – a business developer and two technical experts. Ákos thought this wasn’t enough – a fourth person was needed. László Papp, a marketing expert became one of the four founders. Ákos explains why:
This was important because ultimately chatbot is a communication channel. Many brands want to use it for marketing purposes to communicate with their customers. I thought that marketing is important.
Lesson: Thus, Ákos created a startup team using his personal network only, created roles based on the needs of a startup and distributed them based on people’s personalities and expertise.
Although Talk-A-Bot started as a student project, all of its team members were experienced professionals.
People imagine startups as some young guys out of university, but actually the more successful ones consist of more experienced people. We had 10-20 years of experience per head.
Ákos shared that while he had corporate work experience, other co-founders were entrepreneurs, running local small and medium-size businesses.
Lesson: It’s easier to run a startup when most co-founders have prior work and entrepreneurial experience.
Having entrepreneurs in a team helped Talk-A-Bot expand as they could invite former employees to work for the startup:
The other three guys already had employees. So, when we needed our first developer, our first marketing expert, our first graphics designer, we could get these resources from the other companies that co-founders had. This is great because all of us had experience, including management experience and had resources in the other companies that could be re-directed at Talk-A-Bot purposes.
But this is not the only way in which Ákos and his partners searched for employees. Early on in his career, Ákos joined the Association of IT companies in Hungary. When looking for the initial employees for Talk-A-Bot, he explored this network as well.
The first ones who we hired were developers because it's a tech business. The other first one was a graphic designer because we thought that creating a brand, nice presentation and aesthetics is very important. We searched for people in sales, project management, marketing, etc.
Lesson: build your networks early on and use them for expanding a startup team. Detect crucial roles and find people to fulfil them.
Personalities matter for a winning startup team. Ákos advises getting different personalities on board. Here’s why:
There’s a saying in the startup world that you need a hacker, a hipster and a hustler in a team, I think they say this for a good reason. You need different skill sets covering the key roles in the company and you need different personalities as well. For example, I'm generally a forward-thinking optimist in the team while László, who's a marketing person and business-minded, is always very conservative and thinks about what can go wrong, what the worst-case scenario is. It's good that you have somebody like that in the team because I don't have to take care of that. I can use my mind to think only ahead and I don't have to do both roles. I think that's right, and it is important. Right now, we don't work with László, so I cannot be all the time super optimistic, I have to think about what can go wrong. So, I have to change my mindset.
This applies even to people in the same positions. Ákos gave an example of his technical co-founders – Gergely and Tamás. Gergely at first didn’t understand why Ákos wanted to have another technical expert. Only after they worked together, team members understood how well they complemented each other.
Gergely is more of a creative guy and very good at innovation. But he's not really interested in refining something to perfection. On the other hand, Tamás is very meticulous, maximalist and willing to go in depth.
Lesson: get people with different personalities on board – someone may see challenges from a different angle and thus you will have better solutions.
1. Think big. Nowadays it's possible to go big from day one. Once you get into the local market, it's hard to get out. So, think global from the start.
2. Never underestimate the time, money and effort needed to reach the next milestone. There's just more work and more time and it’s more painful than you expect to get a first client, first contract or so.
3. Enjoy. Even if your goal is too far, too risky, even if you have a high chance of failing, you will never be 25 or 30 years old again. Make sure you live your life and enjoy the work.
Cosmic Cake is a cookie mix startup. It provides ingredients and recipes in unique cosmic packaging for home-baking. Founded by three ladies, Cosmic Cake is one of CEU iLab’s startups that is moving ahead despite the COVID-19 pandemic.
Vera Hervai, a graphic designer who came up with the idea of a Cosmic Cake brand, tells us how she created a startup team and what they are doing at the early stages of their project.
Vera is an economic analyst who was eager to learn graphic design. She once took a course, at the end of which she had to redesign the brand of a famous institution and present it. She chose NASA and with inspiration from her friend Ildiko Gloner (who then became one of the startup co-founders) came up with the idea of filling a jar with some ingredients and making it look like a planet.
I called my friend Ildiko because I knew she's a very good cook and she can bake. I asked her about ideas on what to package in a jar, and she told me about the “do it yourself” trend. That’s when ingredients of a cookie are layered in a jar. It looks pretty nice. I was thinking about how to link this trend with NASA and space. Then I had a spark to cut a circle on the front side of packaging so that the layering would look like a planet. At that point, we were not thinking about the business. It was only a course project.
Vera’s project was selected for a design exhibition. More and more people were telling her to start her own business out of that.
In around five months, we decided: “Let’s actually do it!” So, we started last year [October 2019]. My teammates knew each other for around six years. We have been doing other projects together, around four or five of them. We got to know each other while working together and then became close friends.
Lesson: consider friends, with whom you have prior work experience, as your potential co-founder partners.
It becomes easy when you know people who you are going to work with, Vera’s experience tells.
We pretty much know each other’s skills, competencies and who likes what. I think that was the starting point. For example, I like to think in concepts, ideas, strategy and numbers. So, I’m a conceptual and visualizing type. Ildiko is a doer and Kinga [Kinga Aszalos, strategic advisor and third co-founder] is very similar to me. Together we made a really good combination.
Vera says that she and Kinga can endlessly perfect the design, and Ildiko is the most decisive in their team.
We can endlessly rearrange the design millimeter by millimeter, we notice every tiny detail. Because of this, it's never ready. Only Ildiko can say: “Okay, let's do it. It will never be ready anyways”. She can balance us really well. The fact that Ildiko has a different personality is a huge factor in the success of this coming into life.
Lesson: personalities matter for sharing the roles, people in a team should complement and balance each other.
But is it really a good idea to choose friends as your co-founder partners? What if your relationship suffers?
It's like a double-edged sword. You don't know if it's a blessing or a curse. I really like to work with close friends in business. I think a lot of people begin a startup like that. But I know that some friendships can break because of this. I would suggest deciding what’s more important to you – building a startup, be obsessed about it or is your friendship a priority? If you have a good foundation of the relationship as friends, then in case of a problem in the business the good foundation will solve it. But if you have a problem in your friendship, it will add difficulty in the business. It’s the same if you go into business with your spouse, boyfriend or girlfriend.
Lesson: don’t start a business with friends or partners, with whom you don’t have a solid foundation. Otherwise, it will bring complications to your project.
Vera says it is too early to hire people – and that’s because it’s more beneficial to do everything on their own because of establishing connections.
Right now, we do all the work by ourselves. We would rather change something in the production [than hire someone for sales]. If we outsource the production, it would give us more time to do the sales. At this early stage it’s better if we do the sales ourselves because we get to know the partners, how the market and the entire industry of food commerce is like.
Lesson: don’t rush to hire or outsource – first get to know how the market works by yourself.
1. Three people is very good to have a founding team – it’s easier to come to a majority decision and you will also see alternative opinions.
2. Try to separate business from friendship when working with friends, although it’s hard.
3. Learn how you manage yourself and your time. Startup isn’t like a corporate job – here you are responsible for priorities. Your team members need to have a time management culture too.
We hope that the guide showed you how to create a successful startup team and go through the first challenges of finding co-founders and employee talents. Now it’s all in your hands. Are you ready to start?
The CEU iLab incubation program makes entrepreneurship more accessible by providing mentoring, know-how, network and a community for high-impact teams. All of this in a world-class environment, at a world-class university.Apply