It’s a well-known fact that start-ups are risky - around 90% of them don’t make it. It’s a grim reality, and the challenges often discourage less prepared Founders. But being aware of the main reasons why start-ups fail can help you avoid basic mistakes - and one of them is having the wrong team.
In its first stages, a start-up demands time and hard work. As a Founder, you’re naturally prepared to put in the effort, but your team needs to be just as passionate about the problem you’re trying to solve and your vision for the solution.
“The goal is to do business with people who believe in what you believe.” - Simon Sinek
It’s not always easy to find people who match Simon’s ideal, but start-ups have an advantage: you can spend a bit more time finding the people who follow you on a mission. Hiring someone with the same excitement as you and a can-do attitude is far more important than someone who simply ticks the boxes on skill sets because you can train and develop them - whilst someone who doesn’t have the right attitude or approach will be much harder to fit in.
It’s a given that your start-up team members must be comfortable with uncertainty and readily adaptable - products and services can pivot and start-ups often change direction to meet market demand. But, as a Founder, you also need to be open to people who think differently from you. The team working behind the scenes is vital to the company’s DNA, and although you’ll share the same vision and passion, having different perspectives is extremely valuable for problem-solving.
This requires an honest and transparent relationship from the start, where opinions can be brought up respectfully and not dismissed. Whilst the Founder is the heart of the business, no successful company rests on the shoulders of one individual. It's the diversity offered by an experienced founding team that adds dimension to shape up the start-up. When a cross-functional team of professionals from different backgrounds, expertise and positions comes together, the magic happens.
A start-up is a learning ground for everybody - and, if done well, it’s just a phase. You must hire for the long-term, focusing on where you want your company to be. The right team will be your business’ stepping stone for success: they will grow with you and help your start-up evolve into an established enterprise.
Investors don’t look only at product and financials: they also want to know about your team, which will get as much scrutiny as financials. So focus on building a team of leaders who can head their respective departments in the future, even if they’re not senior professionals now. Once you have a basic structure in place, company growth and team development will allow them to transition into more significant roles later on.
The smaller your company, the more critical each hire is, and also more risky. Hiring the wrong people - especially at the beginning - can do far more damage than holding off and not hiring, so starting slow and making sure each hire is the right one is essential. During those early stages, tapping into external sources of talent can give you the support of experienced and highly-skilled professionals to quickly get your product out there without committing to full-time hires. As the company grows, the less impact a single individual might have - and you’ll have a better understanding of who you need and when, allowing you to hire your permanent team with confidence.
This flexibility is an advantage start-ups have over established companies, and one of the reasons non-technical Founders work with agencies or partner with a Venture Builder like Founder + Lightning. If you would like to find out more about how we work and how our model protects you from the risk of hiring the wrong team early on, get in touch today.