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December - 2011 - issue > Entrepreneur Corner
Team Formation 4KTA
Thursday, December 1, 2011
Team Formation is the key for an entrepreneur in commencing his journey after starting his own company. I would like to provide four key take away (4KTA) points on this topic that are not typically covered in books, for aspiring entrepreneurs. These are mostly based on my own experience and other entrepreneurs whom I have been associated with over the years. Note that these are not in any particular order of importance.

1. Chemistry – It is really important that there is a strong chemistry between the founders of a startup company. In one of The Indus Entrepreneur (TiE) My Story program events recently held here in Silicon Valley, featuring Anand Rajaraman, Founder of Junglee.com, acquired by Amazon.com and Kosmix.com, acquired by Walmarts.com, someone from the audience asked Mr. Tsuyoshi Taira, Former Chairman of Sanyo, Founding Chairman and investor in Junglee, what made him invest in Junglee. Mr. Taira, having been a semiconductor veteran, had no idea about search technology and knew only one founder and did not know other three co-founders, still students at Stanford at that time. His answer was one simple word: Chemistry. He explained further what he meant was that he could sense that there was a great chemistry among these four co-founders who seem to be having fun together. Purely, based on that instinct, he and a group of his friends provided the seed capital to co-founders of Junglee that was sold to Amazon.com for several hundred million dollars within less than three years of its founding.

2. Trust - This is the second quality I would look for in teaming up with other individuals while forming a core team for starting a new company. It is important to document the basic understanding and agreement in terms of roles and responsibilities, equity agreement among co-founders and the time and resource commitments. However, you do need to have the core element of trust beyond any legal paperwork. If you do not really trust one another or one of them, no matter how airtight your agreements are, it will not succeed, as everyone will be second-guessing each other and hence, the start-up will fail. I remember in my first startup company, Ukiah Software Inc., one of my team members used to tell this story that one time, when he was getting a multi-million dollar agreement signed by the vice president of a multi-national in his previous job, the executive told him if he ever had to pull the agreement back from the drawer to read it again, that would be the last day of business partnership. Quite insightful. People do business with people and reason they do business with the people they know is that they trust them.

3. Skill-set and Adaptability – First time entrepreneurs when they decide to start a company, they tend to form a team with some of their close friends with similar background or skill-sets. Nothing is wrong with that as long as they have complementary technology skills e.g., one of them is an expert in mobile user interface and another one is an expert in back-end infrastructure or one being an expert in databases, one in networking if they are working on a service to be delivered. However, this team now needs to be combined with someone who can bring them the product strategy, market validation and customer experience to ensure that as the application is being developed, it is also being validated in the market place in parallel. Having complementary set of experience is very important for a well-rounded team from the inception. In addition, skill-sets need to be combined with adaptable members and personality types – someone is an idea generator but can be bad in execution, so it’s important to have that person to realize and partner with one who is excellent on delivery. Lastly, always team up with extremely smart people and make sure they are smarter than you are. Remember teaming up with someone who is A+ will attract similarly very smart and talented folks to the company.

4. Positive Attitude and Positive Energy – Skill-sets mentioned above have to be combined with team members with Positive Attitude and Positive Energy. If you find someone having all qualities as in point # 3 but not positive attitude and positive energy, then stay away from them. I call them energy vampires. They will drain and suck the energy out of you. You do not have time for that. People with positive energy and attitude are generally extroverted, optimistic and love life and don’t complain about working hard but just pure and simple – love to work and have high energy and will uplift you while you may feel down during the rocky road of startup life. Secondly, they will energize others and inspire the team to take on impossible; and believe me, in startups, that is what you are trying to do all the time. In addition to this, being passionate about whatever the cause you are working on. I look for simple cues like when you try to meet them. Do they meet you when you wanted to meet them? or they are not available most of them time due to being busy with one thing or another?,which may be OK from their life style perspective but from your perspective, it’s a red flag. It tells me a lot about person whether he or she is in the phase of life that they don’t have that much energy left; or it’s not the high priority for them and hence, it will not be a high priority, So perhaps, he or she is not the team member you are looking for. Everyone wants to be part of a successful startup company and wants to be the co-founder or early team member intellectually,but then those need to match with actions in even small deeds, like do they eagerly and proactively jump on an action item right away, meet right away with anyone who could take the company one step forward, or do they push the action item to next day or after few days. By watching all these simple cues, we can assess quickly whether the person is right for the needs of your startup, regardless of the fact that the person may have education from top notch universities or colleges. All these simple cues can show, if the person is flexible, hungry to succeed, adaptable and aggressive and a go-getter.

In summary, my four 4KTA (four key take away) points in startup team formation are Chemistry, Trust, Skill-set and Adaptability, Positive Attitude and Positive Energy.

The author is a Board Member and Chair, Programs, TiE Silicon Valley

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