The big five of a successful startup team
One factor is essential for every startup success: the founding team!
At better ventures, we always search for exceptional teams and we know what to look for. Neither is it about pedigree or resumes, nor about gut feel or intuition. It is an art to build a startup lineup - and if needed, to enhance it.
So what should teams bring to the table?
#1 Be passionate
In the startup game, passion beats experience.
Teams with average previous experience but high level of passion and shared vision outperform others. De Mol’s recent study outlines that they are much stronger than teams with high levels of previous experience and low levels of passion and collective vision.
If you believe in your vision and your team, you are more likely to succeed. But beware. Passion is a double-edged sword. When turned into obsession, it can lead to burnout.
We often see the positive, motivating spark in teams whose business originated from a personal problem or struggle. You did not find your idea yet? Here are 10 major problems we challenge you to fix.
#2 Be persuasive
Your passion will push you, but only in combination with high self-efficacy and strong communication skills will you be able to persuade others. As Naval Ravikant puts it:
"Anyone on the founding team who’s not highly technical should be great at selling: to end users of the product; to investors while raising money; and to potential employees to recruit talent."
We enjoy getting to know teams who burn for their idea and who can articulate it.
What is your elevator pitch? How do you explain your business in a few words?
Always use a structured line of argumentation that is corroborated by facts and data.
#3 Be driven
At least one of you should be a pushy driver. You need a pain in the “neck”, who is not afraid of making decisions.
This will help you gain speed which is essential to win. Particularly if you have a great idea, there will be plenty of copycats out there. So you have to be faster than them.
As a German study conveys, most successful founders have two personality traits in common: drive and dominance. The latter is similarly described as "“the passionate desire to author and own projects” by Butler, who compared 4000 successful entrepreneurs with business leaders.
#4 Be diverse
To all business teams out there, coming from one university, to all tech founders, building the perfect product in a lab, and to all one-gender-only teams: Please mix it up!
The combination of hustler, hacker, and hipster is often recommended for a startup lineup: to have one who sells, one who builds and one who pimps a product. But it is even better to go beyond that. We recommend to assemble the team based on your business model needs.
Sadly, it can at times become difficult to draw value from opposing opinions and conflicts that lie within. Supposedly even 60% of new ventures fail due to problems in the team.
Lencioni’s 5 dysfunctions point us towards the base of any great teams: Do you trust each other? Do you share the same values? And are you able to draw value from different viewpoints?
#5 Be open minded
Different from common beliefs, you do not have to be a risk seeker. However, you do have to be comfortable with risks. The ability to thrive in uncertainty is a must in building your startup.
So stay curious and be ready for change. Constant change. Constant learning.
We like to check teams for their growth mindset. Be open to challenges, embrace feedback, take mistakes as opportunities to learn... You are able to develop these characteristics like a muscle and we highly recommend you to do so.
It was even discovered that an open mindset positively influences resilience. That is a trait needed for any tough job. And founding a company sure isn't an easy ride.
Our team check
Most investors focus on dismantling the business side; however, team insights are equally important. A founder complemented us recently: “I can tell, you are entrepreneurs yourselves. You ask many questions about the team.” Yes we do. A lot of them.
What do you like most about what you do?
How did you last motivate yourself in tough times?
When and how did you make the last critical decision with your team?
Plus, there is a range of analytical tools that can be applied to understand a team and their strengths. We use a founder-friendly behavior assessment and are looking into the power of AI-based tools that try to make team predictions.
Why do we do this? Not because we think there is the one homo entreprenaurus. In contrast, we help teams to recognize and focus on their individual strengths - as well as to add missing pieces.
Join our journey
Are you a motivated team looking for pre-seed support? Get funded now!
Beyond our selected big five, there are additional factors for startup success like timing, financing - and also luck. But we might be able to help you with some of those.
Want to learn more about this topic?
Recommended sources are...
New Venture Teams: A Review of the Literature and Roadmap for Future Research, A. C. Klotz, K. M. Hmieleski, B. H. Bradley, L. W. Busenitz; What makes a successful startup team, E. de Mol;
Personality Traits of Entrepreneurs: A Review of Recent Literature, S. Pekkala Kerr, W. R. Kerr, T. Xu; Unternehmerpersönlichkeiten verstehen, F. Stracke & M. Schmäh; Growth mindest, C. Dweck
5 Dysfunctions of a Team, P. Lencioni; What makes entrepreneurs burn out?, E. de Mol, J. Pollack, V. T. Ho.