Talent

Awareness not Avoidance: Facing Common Founding Team Issues Head On

Two people having a meeting at a conference table with papers in front of them.

When it comes to starting a business, the people you choose to work with are critical to your ultimate success. There is no shortage of advice out there on what to do, or more often what not to do when forming a founding team [see: A Great Founding Team: More than the Sum of its Parts]. Some common examples include: Steer clear of launching a business with a friend. Avoid going solo. Don’t even think about a founding team of five. Find complementary skill sets and seek diverse perspectives. Ensure you have an aligned vision. Find personalities and work styles that gel with yours. There is no magic bullet, but if you can find a way to take all of these well-intended pieces of advice into account when building your team, you’ve got a leg up on the competition — but it is an advantage that may be short lived. Even once you’ve formed the “perfect founding team,” the hardest part still lies ahead. 

Working with co-founders — even those whom you’ve carefully curated — will almost always lead to challenges. Starting a business from scratch is stressful — each day the team is faced with ambiguity, limited resources and an endless list of to-do’s. Forming strong habits early on can help ease growing pains down the road when the organization becomes more complex with increased headcount and higher stakes. So instead of offering advice on how to avoid founding team issues at inception, I prefer to drive awareness to the common pitfalls that slow teams down, and how best to navigate through them.

Chalkboard image with the word choice and arrows pointing up, down, left and right.

DECISION PARALYSIS

You’re a small group of bright people working towards a shared vision. How hard can it be to make a decision about the business? Harder than most would realize — and working through these decisions are often a make-or-break-it scenario for the team. As well as you get along, people are bound to disagree when confronted with choosing a critical path for the company. Early on, decisions are driven by instinct and past experiences, and can quickly become personal and emotional rather than objective and logical.

The worst thing about these scenarios? Everyone loses when the team is unable to move forward and quickly hash out issues. Startups cannot afford to waste weeks arguing about initial strategy or logistics. But, understanding why these issues exist is the first step towards mitigating their impact. 

These crossroads often come to light when you’re working with limited data. They can be exacerbated by the team’s short time working together. Hierarchy or unequal equity can also throw a wrench into the mix. Founders with more equity may feel emboldened to override the group’s opinion. Those with fewer shares may feel as if they have no voice, or feel less incentivized to contribute to an equivalent degree. A tip:  Although every situation is unique, in the M13 Launchpad, we prefer to avoid hierarchy at the start by offering founding team members equal ownership and allowing leaders to rise to the top organically to earn their extra equity.

Two people having a meeting at a conference table with papers in front of them.

Five ways to combat a standoff

  • Data, data, data. Proof is in the numbers. It’s easy to argue instincts, but it becomes more difficult to argue data. Collect information as quickly as possible and let the data guide your decisions.
  • Let the market/consumer speak for itself — again, don’t waste too much time fighting over intuition. The “MVP” model has been well established for product development, but the same theory applies to most strategic decisions with more than one logical path: make a smart and thoughtful decision, implement it, measure results and iterate quickly.
  • Set time limits for discussions and deadlines on decisions.
  • Have the right mix of skill sets on a founding team, preferably with clear workstream owners. If owners are respected by their co-founders for the expertise they bring to the table, then they should feel empowered to make the final call while still seeking opinions from the team. 
  • Establish framework and strategy together, but don’t micromanage others’ executional approach. Founders are likely to have a bit of a healthy ego, so giving everyone a seat at the table to place a thumbprint on the process early on can help to avoid conflict down the road. But remember, autonomy and trust are key to building a healthy team dynamic.

A good example of data being used to break a logjam involves Kindra, a startup being incubated in M13’s Launchpad (in partnership with P&G Ventures). The team is working to bring estrogen-free, OTC solutions to market to help women alleviate many of the common symptoms of menopause. Recently, they used clear data points to make a difficult decision a bit easier. Although the products and an initial brand concept had already been introduced to the market in a limited test, the team was tasked with making a final selection of the brand name for the company’s formal launch. Naming can be an emotional process — this business will be their baby for years to come — but the goal is to bring a brand to market that resonates with consumers, not just the founders. With a mix of quantitative surveys and qualitative data obtained through Remesh (an AI-powered digital focus group platform), the team was able to narrow down a long list of protectable names in order to move forward with a name that the data supported as the clear winner. 

SKILL SET GAPS

You’re a small team trying to achieve a great deal. No matter how talented you are, there will come a time when you need certain expertise unfilled by your founding team. It could be anything from HR issues to legal know-how to graphic design. Filling gaps when you have limited resources (people and money) takes some creativity. Perhaps you need a branding expert or someone well versed in performance marketing. You can’t afford to hire a full time employee. What to do? 

First, it helps to have a comprehensive view of your business. A tool like the Business Model Canvas is a great way to understand the key activities, resources and partners that the business requires. It can also highlight gaps in your team makeup and serve as a framework for discussions regarding hiring vs. outsourcing. Table graph of skills

And yes, outsourcing can be costly, but so is a company in the throes of inertia. Below are a few suggestions for sources that could be more cost efficient. 

Fill those Gaps

  • Target local trade schools for interns with hard skills looking to build their resumes (General Assembly, FIDM, etc.).
  • Build relationships with young agencies seeking case studies to sell their services to bigger fish down the road.
  • Find individuals working in-house at relevant companies who have time for side hustles (i.e. instead of hiring a performance marketing agency requiring expensive monthly retainers, find someone heading up growth at a later stage startup who will work for a more affordable rate during off hours).

WORKING IN ORGANIZED CHAOS (or just chaos)

As a founding team, you’re working like crazy to set up a structure, prove out your model and get things done. But it’s never too early to establish KPIs, milestones and workstreams, no matter how small or young your company is: 

  • Create a 90-day plan with achievable milestones divided up into 30-day increments 
  • Assign owners to specific milestones with realistic timelines
  • Track progress to drive accountability and serve as a framework for resource management 

I recently sat down with the Kindra team for a two-part work session. The first focused on establishing 30/60/90 day milestones granular enough to be measurable, while the second focused on identifying organizational gaps that would inhibit the team from achieving these milestones. 

The Kindra team, like most founding teams, has far too much on their plates to reasonably manage over a 90-day period. While taking time to put everything up on a whiteboard likely led to stress-induced nausea, the output helped the team prioritize (and more importantly, deprioritize) certain activities, while highlighting key gaps in expertise that need to be filled. Filling the gaps will require creative solutions and resources as previously discussed, but these exercises helped to align gaps with time-sensitive milestones — informing the team’s decision in both how and when to fill these gaps.

Take time to pat yourself on the back

Just as important as driving accountability and effective resource management, milestones provide moments in time for teams to celebrate progress. As you’re crossing big “to-do’s”off your list, take a moment to celebrate your wins. Slow down and recognize all you have accomplished. You’re moving fast and it’s important to pat both yourself and your team on the back. Measuring success and maintaining momentum is as critical to a company’s growth as just about anything. Check in with your team to see how they feel about their progress. Having a team that feels productive and appreciated equals a winning path forward. 

Andrew Grone is a recent graduate of the UCLA Anderson School of Management, with operating experience at Fortune 50 and early-stage startups. Currently, he is the Program Manager of M13’s Launchpad working alongside entrepreneurs to bring new brands to life.