The people who make a great founding team

A founder typically recruits co-founders and then becomes part of the team involved in day-to-day company operations. FILE

By STEVE BLANK

IN SUMMARY
Founders come up with idea, then work with a complementary team to build the company that is led by a visionary

There’s been a lot written about the individual characteristics of what makes a great founder, but a lot less about what makes a great founding team and how that’s different from a great founding CEO.

By being imprecise in defining three different roles, we’ve failed to help founders understand what it takes to build a great founding team. Here are my definitions:

Founders — the idea:

A founder is the one with the original idea, scientific discovery, technical breakthrough, insight, problem description or passion. A founder typically recruits co-founders and then becomes part of the team involved in day-to-day company operations.

However, in some industries such as life sciences, founders may be tenured professors who are not going to give up their faculty positions, so they often become the head of a startup’s scientific advisory board, but aren’t part of the founding team.

A couple of caveats about founders with “ideas.” It’s important to differentiate between ideas that have been or can be patented and ideas thought up late at night in a dorm room. One of the hardest concepts for my students to grasp is that “an idea is not a company.”

The reality is that in most cases, without the company to commercialise it, the idea is worthless — except to a patent troll.

It’s not a given that the founder, having come up with the idea, has a “guaranteed” leadership role (CEO or VP) in the new company.

For some entrepreneurs, this idea that the founder is not necessarily the CEO, is a surprise. When I hear, “What do you mean I’m not CEO? It’s my idea,” I get nervous that the founder is clueless about what makes the founding CEO special, and what else it actually takes to build a company.

Founding team — the rock on which to build the company:

The team includes the founder and a few other co-founders with complementary skills. This is the group that will build the company.

Its goal is to take the original idea and search for a repeatable and scalable business model, first by finding product/market fit, then by testing all the parts of the business model (pricing, channel, acquisition/activation, partners, costs.)

In web/mobile startups, the canonical view is the founding team consists of a hacker, a hustler and a designer. In other domains, the skill sets differ, but the key idea is that you want a team with complementary skills.

There’s “right” number of founders for a founding team, but two to four seems to be the sweet spot.

One of the biggest mistakes in assembling a founding team is not thinking through the need for skills, but instead settling for who’s around.