Steve Blank: How To Build A Winning Business Team

To start a successful business you need to create a founding team with complementary skills and off-the-charts passion for your idea.
Contributing Writer, SmallBizTrends.com
August 12, 2013

Back in the 1990s, when small-business ownership metamorphosed into its sexier version—entrepreneurship—entrepreneurs were thought to be lone wolves, the antithesis of team players.

And while there are plenty of solo entrepreneurs today, truthfully that concept is not very entrepreneurial. Entrepreneurs today understand that it's important to have a solid team in place to build a successful startup.

It’s also important, says Steve Blank, a serial entrepreneur and associate professor at Stanford University who created the concept of the "Lean Startup," to understand not all startups have the same goals:

  1. Lifestyle business owners work so they can live. The goal is to survive, and by starting a business, they’ve essentially bought themselves a job.
  2. Small-business owners don’t want to (or can’t) work for someone else. Their goals are to feed their families. These folks are historically what we think of as small-business owners (many are immigrants). These businesses are not designed to scale.
  3. Entrepreneurs are those folks we think of today as the Silicon Valley types—those who start scalable, high-growth companies with the idea of “taking over the universe.” The goal is to “go public and make billions.”

And although there are exceptions—people who start out to feed their families and end up ruling the world—Blank says business founders need to be realistic about their skills and limitations. “It requires insight and self-awareness,” Blank says. “You can beat your chest and say ‘it’s all mine,’ but then you’ll always have a small business.”

Founder vs. Founding Team

If you want a scalable business, Blank believes it’s not enough to be a great founder. High-growth companies, he says, require great founding teams. “Few founders can actually execute,” he adds. He points to ice cream legends Ben and Jerry as an example—they realized you can keep your values and still put your business in the hands of people who can make it happen.

This kind of realization takes a lot of insight. Blank recommends you “ask yourself, ‘Are you clinging to a CEO title for ego gratification?’ 'Do you want to stay CEO or do you want to make money?'”

If you vote for making a fortune, here’s how Blank says the team structure works: Founders are the people who come up with “the original ideas and technical breakthroughs.” This is where ego can interfere. Blank warns entrepreneurs, “It’s important to differentiate between ideas that have been or can be patented and ideas thought up late [at] night. An idea is not a company. In most cases, without a company to commercialize it, the idea is worthless.”

If you can get past this, the next step is to “recruit co-founders and then become part of the founding team involved in day-to-day company operations,” Blank says. He has another warning for founders: “Even if [you] become part of the founding team, it’s not a given [you will have] a guaranteed leadership role in the new company.”

The founding team includes the founder and a few co-founders. “This is the group,” Blank says, that “will build the company. Its goal is to take the original idea and search for a repeatable and scalable business model.”

There’s not, Blank explains, a “magic number” about how big the founding team should be, but he add, “two to four [people] seems to be the sweet spot.” And don’t settle, he warns. “The two tests of whether someone belongs on a founding team are: ‘Do we have a company without them’ and ‘Can we find someone else just like them?’ If both answers are no, you’ve identified a co-founder. If either answer is yes, hire them later as an early employee.”

In the world of Silicon Valley, founding teams usually consist of “a hacker, a hustler and a designer,” Blank says. Obviously, other industries have different needs. The key, Blank explains, is assembling “a team with complementary skills.”

Shahab Kaviani, cofounder and CEO of CoFoundersLab, agrees and adds, “Founding teams need to complement each other in personality as well. BOSI refers to it as Entrepreneurial DNA. [You need] a builder, an opportunist, an innovator and a specialist. Collectively the founding team needs to have people who cover all these roles.” 

Blank compares building a founding team to finding the person you want to marry. “Most startups fail,” he explains, due to “team issues because the co-founders hadn’t dated first, [spent time or worked together], but instead jumped into bed to start a company.”

The CEO's Role

Then there’s the founding CEO. This is the person, says Blank, who is the “ultimate true believer in the company and has the vision, passion and skill to communicate why this seemingly crazy idea will work and change the world.”

But the founding CEO is selling what the founding team creates. Blank says you should look for these attributes when building your team: passion, determination, resilience, tenacity, agility and curiosity. Mutual respect, says Blank, is also essential.

Kaviani says it’s important to “respect and appreciate” members of the team “for the strong command they have of their [individual] craft.” And he adds, resourcefulness is a key attribute, “especially during the startup phase, when you're underfunded and you've got to be able to squeeze blood out of stone.”

For teams to be successful, trust is the most critical consideration. Blank says, “You need to be able to trust your co-founders to perform, to do what they say they will and to have your back.”

If you still think you can go it alone, Blank says you’re not facing reality. He compares it to starting a bed and breakfast—“the bucolic vision vs. the reality of cleaning toilets.”

“Everyone has ideas," Blank explains. "It’s the courage, passion and tenacity of the founding team that turn ideas into businesses.”

Or as Apple’s Steve Jobs said, “My model for business is The Beatles. They were four guys who … balanced each other and the total was greater than the sum of the parts. That's how I see business: great things in business are never done by one person, they're done by a team of people.”

Read more articles on leadership.

Photo: Getty Images

 

Contributing Writer, SmallBizTrends.com