Editor’s note: While Steve doesn’t necessarily work in SaaS, many aspiring CEOs will need to think like an entrepreneur, an area where Steve is an expert. This focuses less on how building your team is focused on the customer, but is a very valuable article to anyone that plans on creating something out of nothing, a SaaS specialty.
If you want to be an entrepreneur, you’ll have to plunge into the world of uncertainty.
Doctor Chris Coleridge, the Director of the Cambridge Judge Launchpad told his
class on the first day, “if you think you are an entrepreneur, you are an
entrepreneur.” Think about those words. It is reassuring to those who want to
leave a structured corporate world and test the hypothesis-are you an
entrepreneur.
But expect the unexpected, because the data you need to analyze your
competitors, your analysis of the target market’s acceptance of your product
offering, and pricing are not readably available. Much of it is proprietary, or if
you are creating a new market in your industry, you can expect even more
uncertainty. If you can master the inevitable hurdles you may be the next Bill
Gates, plunging into to a new world, by “seeing what nobody else can see.
Professor Eric Wood, Judge Business School, Cambridge wrote and I quote “By
definition, entrepreneurship attributes a disproportionately important role to
the founder(s) in determining the shape of outcomes in a venture.” A poem,
written by John Donne (1624) says in part that “No man is an island in entire of
itself.” Both hit at the nature of the successful venture, a team devoted to the
same goals, the successful completion, and execution of a business plan and in
many cases luck. It takes a team, not the creator(s) working by themselves.
My hope is to provide you with a few insights based on 40 years of experience
on the challenges finding the right team:
Unless you have the capital or access to capital, you are constrained in
many ways to pay your group, capital at considerable costs, etc. So many
entrepreneurs, also without capital have to find talent whom can see the
gold at the end the tunnel-the vision. The founder is limited to part-timers, not conducive to group communication, or in some cases to the
original vision.
Ownership that is fair to everyone is really problematic. Valuations are
hard to calculate, which makes the promise to the contributors
problematic-what is the reward for working nights and weekends?
The beginning is static, all of the team at a level playing field. Gradually,
contributions change, some exceeding expectations, others substantially
below. Upon confrontation, inevitably the weak link argues that it is the
founder’s lack of communication, the team, not their often over-stated
work. But the rest of the group sees the disconnect which can be
disheartening. Therefore, you can’t delay. You terminate that member
immediately and trust that your legal documentation protects against a
disgruntled former teammate.
People change, a part of life. Their drive and ambition wanes or their
willingness to devote endless hours becomes less important. Maybe it is a
newborn child, a disgruntled partner at home, or a change in job location.
In some cases, they challenge the team structure, having decided that
they need to take charge, despite the fact that they don’t have the
leadership qualifications. But it can be very destructive, even the death of
a doable idea.
It very probable that your venture will experience turbulence from the
time that you take off, until the second that you land. That is when the
founders need to lead and inspire a worn out group. The target market
that once seemed all but sure is taking longer to embrace your product.
So the passion begins to diminish with your team. As a founder, make the
case over and over that there is light at the end of the tunnel.
At the same time, good news gets the adrenaline pumping. Things like the first
contract or the evolution of a digital model that is finally scalable (oftentimes after
many crashes). But always, recall as the founder, it was a group effort.
There is no “how to book” on how to identify and build a good team. My
best advice is to develop a stock incentive plan that recognizes contributions
over time, and not skill sets. Have a document prepared that makes it clear
about your expectations of them. As mentioned above, don’t hesitate to
terminate a disruptor. Since you don’t have the luxury of compensating a member of the group, do as much research as possible about your candidate.
Can they handle the untold effort? Finally, given the challenge of group
communication, schedule conference calls regularly.
Best of luck. Keep reminding yourself that you are an entrepreneur!
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Steve Graver is an entrepreneur and managing member at Graver Capital Management LLC in Lake Bluff, IL and a guest contributor.
Chicago Customer Success 