Partners and Advisors

So as the three of us are working together, we are also discussing what skills we have and what we need; what players are missing from our table.  Perhaps some of the readers may know better than us, and can lend their two cents in the comments, but here is what we have come to learn so far re: the development of an early-stage team:

Well of course, the first thing is to assess what you are bringing to the table.  Are you an experienced entrepreneur?  A CEO or COO?  A front end designer/developer?  A back end programmer?  Or even just the person with the money? I have found that sone of the most important things to assess are:

  • Are you a talker or a listener?
  • Are you creative, with big ideas and tons of inspiration, or are you grounded and practical, tweaking what you are given?
  • Are you a planner or a doer?
  • Are you a developer?  If so, is it front end or back end?  Would you architect a whole site and database, or do small detailed projects?

Once you’ve figure these out, you need to…

While there are start-ups founded by one person, you will almost always see the most successful to have pairs.  And usually the pairs are made up of one outgoing partner, and then a quieter supportive one: Larry Page and Sergey Brin, Steve Jobs and Wozniak, Larry Ellison and Bob Minor…the list goes on.  I, personally, feel that you simply need another person to bounce ideas off of, to help the thing that exists grow.  I think that, regardless of your other skills – whether they be finance, design, programming, business – there are two types of founders out there, and you better be damn sure you have both.

Big Ideas/Creative
On our team, I frequently consider Christian to be this individual.  He brainstorms ideas from nothing, just imagining something he would want and figuring out how best to do it.  He can envision it on a huge scale, how it changes people’s interactions, or redefines an industry, or draws hundreds of millions of users.  He can discover five solutions to problems that haven’t even been encountered yet, and throw out three more if those arn’t liked.  He would like nothing better than to be in a room with a bunch of intelligent and creative thinkers, dreaming up a project and how to build it.  People like this are necessary for a company to grow and prosper.  He keeps us motivated and inspired; he reminds us we are doing this, keeps us thinking and sharing and reaching for our goals.  Thankfully, he can also get into a project and think practically, too, which is important…

Small Ideas/Practical
I consider myself, and am frequently referred to, as the practical one of the group, the grounded partner.  Its hard for me to dream big when I know our user count will just pass 50 on launch.  I enjoy being given a big idea and refine it, recognizing its weaknesses and developing solutions, assessing time lines and priorities and keeping people focused and down to earth.  I’m always watching the numbers: the bank account and the days until its empty, the number of users and their satisfaction.  I’m working on the small projects: how do get more invites sent, better metric technology, more balanced gold economy.  I’ll politely listen to new ideas, find a place for them, and remind people of what our top priorities are now.  These people, ideally, tame the big thinker and help the company make its way toward a world changing endeavor.

Now, you do need more than just two people, but you should keep a good balance between the two categories above.  Everyone on an early stage start-up should share pieces of both of those categories, I think, but the dynamic of your team should definitely favor the practical: you’ve had the idea, now you need to do it with a minimal amount of changes and bickering.  You will need a CEO, COO, CTO, and CFO type.  Practical skills for early-stage employees to have include knowledge of SEO, metrics, financial forms and strategies, small business development, PR experience and connections, a variety of programming languages specializing in the one you use, and of course social web experience.

Keep in mind that your advisers are generally not people who have a lot of time to give, so don’t rely on them to build your metrics gathering system or design your logo.  But they should be dedicated to seeing you reach success and happy to look over your products and examples, offer advice, and make introductions for you.  I first suggest you find someone who understands raising money and financing.  Someone who knows VCs and angels, how to approach them, what to have prepared, etc.  The second would be someone highly experienced in your field.  Working on a social network?  Get a high-up from Facebook, Myspace, Bebo, or Hi5.  Making some video sharing thing?  Look to people with YouTube, Rev3, Ustream, or Seesmic experience.  Have a huge tagging aspect?  Try Flickr, Delicious, or WordPress.  These people know the technology and how to access the market.  By this point, ask them who else they think you should have – if they are good advisers, they’ll know.  Usually, someone experienced in Biz Dev and someone well known in the world to evangelize your product are useful.

But wait!, you say.  How can I hire and pay all these people without any funding?  When can I raise money? A good question, and one that depends entirely on your situation.

Tough cookies.  There was a time when you could take just an idea and some drawing to an angel and still get seed-level funding.  With the economy going how it is, those times are pretty far past.  I don’t want to say it is impossible, as I’m sure someone could come forward with an example of it happening recently, but its tough.  Its the real Black Swan.  Most early-stage investors at least want a team of founders, a prototype, and generally even some traction (even if its just showing that a few hundred of your FB friends have been using it in beta testing for a few weeks, and havent left.)   You can certainly try to raise money with just an idea, but it’ll be REALLY tough right now.

Well lucky you; don’t go flaunting that fact too heavily, or someone else will try to recruit them.  In fact, make sure these people are incredibly tied to your idea, that they have a lot of faith in you and wouldn’t leave for somewhere else just because that place can pay them.  Think carefully about giving these people a founding status (and ammount of equity) or atleast a founding-employee.  So now, with your idea, a good developer or 2 (dont have more than 3 this early on, I suggest…too many cooks and all.), a person to focus on raising money somehow, and a person to work on user growth – start making a site.  Once you’ve got a prototype ready, ask for lunches with possible investors (see my post on these) and chat with them; peak their interest.  Then make a deck and elevator pitch(<-great advice) and start sending it around.  Definitely have images from your prototype in it.  You should be doing a lot of alpha testing (which I’ll discuss in a later post) while these early meeting are going on, so you have user testimonials and traction to show at the next meeting you hopefully get invited to.  From there on, its a lot of luck and negotiating.  (PS: While not necessary, having a good advisor that can intro you to the people and name drop from you is definitely helpful!)

Then why are you asking me?  Go talk to them about funding and hiring.  Ask about how you may be able to attract people using small ammount of equity and promising back-pay.  See if they can help you with decks and elevator pitches and cap tables and the like.  Hopefully, if they are good, they can begin introducing you to VCs, angels, and other possible early-stage employees.


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