As a start-up entrepreneur, the most important thing you will do once you have hit upon the business idea you would like to pursue is to put together your team.
Teams are important: As co-founder and chief executive officer of my company, I am the external face of the organization. In the last three months, I have received three awards for achievements in business or entrepreneurship. While I got the awards in my individual capacity, they really were for what the organization has achieved.
And what the organization has achieved is the result of the efforts of everyone who is working here or has worked here in the past.
It is a myth that entrepreneurs are supermen who lead and build companies largely on their own. In any enterprise that has achieved some size and scale, you can be sure there is a large and capable team at work with one or two of the promoters being the public face of the organization.
In fact, one of the most important things that venture capital investors look at when deciding to invest in a company is the quality of the team and not just at the founder or the chief executive.
Great entrepreneurs are people who have the ability to make others want to work with them. They love their people and their people love them. They are the glue that binds the team in the start-up phase. They are great people managers—maybe even Pied Pipers. They are prepared to share the wealth and the credit. They are magnets for talent.
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At the start, use your personal network: The first team will comprise you and your partners. These will be people you know, trust and respect —friends, classmates, colleagues. You have shared an experience. You are all fired up by the idea. You bond well. You will share ownership substantially.
The next step will be to gain the confidence of people you know, perhaps not that well—acquaintances, friends of friends. They will join because they believe in you, your partners and the idea. They will carry the torch with almost the same passion as you do.
They will be missionaries, not mercenaries. They will take salary cuts and significant employee stock option plans. Frequently, entrepreneurs are not able to easily attract high-quality people in the early stages of a business. They tend to compromise, only to realize as the company begins to scale up that they should have hired better at the start. Remember to set the bar high even in the initial stages.
Chances are you will keep the team small till you are cash-positive or get access to capital. A team that will don varied roles—a team of all-rounders who will be doing more than one job in the company. They will burn the midnight oil to make things happen. Yet, dependence on you and your partners will remain high.
Managing the team when scaling up: When you raise external funding, the investors would want a broad-based team to invest in. This is the time to attract talent you can depend on in the future. People who will man the boat and make sure it sails in smooth and rough waters. This is the time to invest in future department heads of the company.
As the business grows, the team will get bigger and a whole lot of new dynamics will come into play. Processes, human resource policies, administrative and legal formalities, and most importantly, conflict. You will wonder what happened to the magic of the early days. You might even lose a few members of the original team. It will be up to you to create coherence out of the chaos. You will require specialists for every team, and they come at a price. Soon, you will cease to be a start-up. This is the stage of managing a transition. You will have to learn the art of sailing in two boats at the same time, for there will be the soul of a large company in the body of a start-up.
From entrepreneur to CEO: Finally, when your company grows large—perhaps it does an initial public offering—you will be even more dependent on other people in your team than before. It will gradually dawn on you that you are more of a chief executive now and less of an entrepreneur. And perhaps you are presiding over precisely the same kind of system that you left in order to become an entrepreneur.
Maybe it’s time to plan your next start-up!
The author is co-founder and chief executive officer, Info Edge (India) Ltd, which runs the Web portal Naukri.com. He writes a monthly column on careers and enterprise.
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