Gies College of Business at Illinois

Department of Business Administration

Team Building

Module 3 Lesson 1

Tom Parkinson
Module 3 Lesson 1

Team Building
Building the Team

“I’d rather invest in a great team with an average

idea than an average team with a great idea”
—every venture capitalist ever
Building the Team

Great teams find ways to make something out of

nothing
• Or something big out of something little
Average teams will screw up what could have
been a great opportunity
• Most startups fail, which means that average
teams fail
Co-founders

Teams with 2-3 co-founders tend to perform best

• The domain expert – understands the market
need and the desired solution
• The product expert – able to build a product to
meet that need
• The business expert – able to manage the
process and handle rapid growth
Team Dynamics

Shared vision:
• Are you all building the same company?
Passion:
• Will everyone do what it takes to win?
Complementary skills:
• Are all the pieces in place?
Team Dynamics

Trust:
• Can you count on each other to follow through?
Chemistry:
• Can you develop a successful corporate culture?

It’s rare to see successful startups in which the co-

founders were strangers
Key Early Hires
Sales
Product development
Customer support/engagement
Marketing
Production
Operations
Finance
Advisors

Good advisors can complement your team’s

strengths and cover for your weaknesses
• Industry or domain experience
• Industry, strategic, or financial contacts
• Sounding board for management
Advisors

Use advisors wisely

• Let them know what you need from them
• Keep them engaged
Management Transitions

Startup teams may not function well in the post-

startup environment
When do you need to hire new top management?
• When the job has changed and the skills are no
longer a fit
• When the individual has lost passion for the job
• When key stakeholders demand it
Management Transitions

Successful startup teams plan ahead for

management transitions
• Keeping current with job descriptions
• Developing recruiting strategies and identifying
potential candidates in advance
• Planning for ongoing roles for co-founders
Defining Roles

Hiring to meet the needs of the business:

• What key activity is the team unable to perform?
• Can a candidate thrive in a startup environment?
• Develop metrics to measure performance
• Fire quickly if it’s not working
“Athletes” vs. “position players”
Recruiting
Great people have great options. You need a plan to
successfully recruit and retain them
Recruiting channels:
• Personal relationships
• Referrals from other entrepreneurs
• Referrals from your own employees
• Referrals from customers
• Hiring away from other firms
• Advertising
Evaluating Candidates
Look for people who are:
• Comfortable with ambiguity
• Creative problem-solvers
• Eager to learn new skills
• Able to achieve goals with limited resources
• Willing to take ownership of what they do
• Able to fit in with the company culture
Evaluating Candidates

Avoid people who:

• Need a lot of structure and supervision
• Resist change
• Focus on current vs. future rewards
• Say “that’s not my job”
• Don’t buy into the company culture
Selling the Vision

Remember the three reasons why somebody would

want to get involved with a startup
• To make money
• To make the world a better place
• To have fun
If you can provide all of these, you should be able to
recruit the right people
Selling the Vision

“If you’re offered a seat on a rocket ship,

don’t ask what seat! Just get on”
—Eric Schmidt, CEO of Google

Sandberg, S., 2013. Lean In: Women, Work and the Will to Lead. Deckle Edge.
 Gies College of Business at Illinois
Department of Business Administration

Leadership

Module 3 Lesson 2

Tom Parkinson
Module 3 Lesson 2

Leadership
Entrepreneurial Leadership

“… organizing a group of people to achieve a

common goal … by optimizing risk, innovating to
take advantage of opportunities, taking personal
responsibility and managing change within a
dynamic environment …”

Roebuck, C. 2011. “Critical Need for Entrepreneurial Leaders During Turbulent Times.”
www.chrisroebuck.co/ciricical-need-for-entrepreneurial-leadership-during-turbulent-times/”
Leadership Styles
Participative leadership:
• Democratic
• Empowering
Assertive leadership:
• Autocratic
• Assertive
Participative Leadership

• Consensus driven
• Decentralized
• Motivates through a sense of ownership
• Can lead to delays in decision-making
Assertive Leadership

• The leader’s vision is key

• Faster decision-making
• Can be demotivating
• Stressful
The Leader’s Responsibilities

Be the role model

• Demonstrate optimism
• Prioritize problem solving
• Have a bias for action
• Build a corporate culture
The Leader’s Responsibilities

Build the team

• “A players hire A+ players1”
• Encourage them to be even better
• Reward their successes
• Fire when necessary

1Kawasaki, G. 2015. The Art of the Start 2.0. Penguin Group. p. 72.
The Leader’s Responsibilities

Communicate your vision

• Create a sense of urgency
• Establish milestones and delivery dates
• Remove obstacles
The Leader’s Responsibilities

Assemble resources
• Board members and advisors
• Finances
• Strategic partnerships
The Leader’s Responsibilities

Manage yourself as well as your team

• Embrace change
• Avoid ethical shortcuts
• Be willing to say “I don’t know"
• Focus on the big picture
• Stay healthy
Guy Kawasaki’s Leadership Matrix

What kind of leader are you?

Incompetent Competent
Not asshole Third most desirable Most desirable
Asshole Least desirable Second most desirable

Would your employees agree?

1Kawasaki, G. 2015. The Art of the Start 2.0. Penguin Group. p. 78.
 Gies College of Business at Illinois
Department of Business Administration

Building Credibility

Module 3 Lesson 3

Tom Parkinson
Module 3 Lesson 3

Building Credibility
Building Credibility

Startup Rule #1:

Most startups fail

Investors, customers, employees, and partners

all know about this rule
How can you show that your startup will be an
exception to this rule?
Leadership

Credibility starts with leadership

• Communication skills
• Competence
• Vision
• Roadmap
Track Record

Even before you start, you can gain credibility by

highlighting your team’s track record:
• In previous startup companies
• In the target industry
• With your target customers
Doing Your Homework

Demonstrate that you fully understand the

opportunity
• Market size and attractiveness
• Target customers
• Channels
• Value proposition
Customer Discovery

How many real customers have you talked to?

• To understand their pains/gains?
• To understand what they need in a solution?
• To understand how they would buy?
• To understand who/what influences them?
Comparable Companies

Have other companies provided a roadmap that

you can follow?
• To help others understand your strategy
• E.g., “Netflix for camera lenses”
• Can you point to other companies that have
been successful with a similar strategy in your
Target Market?
A Trusted Authority
Becoming an acknowledged expert – on your
value proposition
• Establish a web presence early
• Social media
• Blogs
• White papers
• PR
Minimum Viable Product

A basic, stripped down version of the product,

enough for:
• Customers to understand the value
proposition
• Customers to be able to provide real feedback
• Customers to be willing to pay something for
Minimum Viable Product

Your MVP should help you demonstrate that the

technology is feasible, and that your team can
build the product
If you have an MVP, show it!
Partnerships

Partners can add credibility to your venture by:

• Providing access to markets and distribution
channels
• Providing access to technology
• Committing financial resources
• Providing a “Good Housekeeping Seal of
Approval”
Market Traction

Nothing is more convincing than real sales

(except real profits)!
• Revenue
• Gross profit
• Lifetime value of a customer
• Customer acquisition cost
Early Adopters

• They know they have the problem

• They have the money (budget)
• They have tried to solve the problem before
• They can influence others
Evangelists

Turn your early adopters into evangelists

• Listen to their feedback and act on it
• Support them!
• Give them tools
• Give them rewards
Milestones

Milestones are specific accomplishments that

add value to the business by validating your
assumptions and your strategy
• Technical
• Financial
• Operational
Milestones Achieved

What milestones have you achieved to date?

• Market awareness/visibility
• Product/MVP
• Customer discovery/product-market fit
• Revenue/market traction
• Operational/scalability
Milestones to Be Achieved

Have you identified the milestones that you

must achieve in the future to add value?
• By reducing risk
• By validating the business model
• Short-term and long-term
The Right Team for the Job

Stakeholders want to believe that your team

has ”the right stuff” to:
• Build the product
• Access the market
• Manage the business
• Earn attractive returns
• Without screwing it up!