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Why is a team important to startups and new companies?

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Your team is the group of people in your startup that are committed to building the running, and building the company toward success.  Technically speaking, the office dog can also be part of the team, but we will leave that discussion for another day.  A team is a crucial part of every startup and something that every founder should take very seriously from the beginning to the end.  How crucial you say?  23% of startups fail because of issues related to their team.  If that number doesn’t explain the importance of a strong team then I don’t know what does.  There are a few considerations to take when making decisions to assemble your team.

Building your team starts with evaluating your business and what tasks need to be fulfilled to launch your product.  What is the vision of your startup?  What is required to execute this vision?  Constructing a team is strategic and difficult.  Not everyone wants the risk of starting a business.  Then again, how many people do you know that are willing to quit their day jobs to join a high risk company?  The first thing you’ll need to do is identify the positions you need for your startup to function for the near and long term.  Startups have one goal, which is to grow.  So it makes sense, the people you invite to join you on your journey to building a company should be able to help your startup grow into an established business.

Getting the right pieces and placing them in the right position will provide for a strong foundation.  Much like chess.  The best way to look at team building is thinking several steps ahead.  The best way to win at this game is to be ahead of the game as a mistake could be detrimental to your startup goals.  It is impossible not to make mistakes but the goal is to reduce the amount you do make.  In a startup, you will often need a good mix of specialists and generalists.  In the beginning stages of a startup, the founding members handle 100% of the day to day operations until they are ready to hire more team members to help them make their vision come true.  It is very easy to choose a friend as a team member because our automatic thinking is that we will get along and life will be great.  While you do need people that you get along with, you also need people that are specialists in what you do.  A generalist will suffice in the beginning as long as that generalist is someone that can solve a broad range of tasks and get things done.  If you have access to the specialist you need like an APP developer then you are already steps ahead of the game!

Attracting partners that will have skin in the game or own equity of your company is much different than employees who will be paid to provide a service toward your startup company.  The way that we look at it is recruiting a founding team is like buying a house and sharing it with them.  Hiring an employee is more like renting that house.

The founding team is the team that will stick with you long term and eventually work with you full time on building your company.  We never recommend quitting your job to start a company.  You may have heard that only 1 in 10 startups actually make it.  Well for that reason it is probably wiser to keep your day job in case something goes wrong in your startup, at least until your company can support you.  It is important to remember, that the founders are going to be with you for a long time.  This person or persons will be with you through thick and thin.  So choosing someone wisely is key.  We have seen of founders arguing during a pitch in front of grant programs and investors.  Do you really think the investor place their hard earned cash into that company?  You guessed right, they did not.

You might ask yourself how much a team matters to investors?  To quote a very popular accelerator program with programs globally: “We first look at the team, team, team”.  So, yes the team does matter.  And if you still are not sure, check out the criteria for some of the investors in your area.  You may have heard that building a company comes with an overwhelming amount of work.  In a tech company you need engineers to design and build the product, marketing to develop plans to reach customers, a president or CEO that will help manage the company and also raise the funding to help it grow.  This is why a team matters so much.  One person in a company cannot do everything that is necessary for it to be successful.  The point is: you need a team to grow your startup into a successful venture.

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