Startup Team Structure

Entrepreneurs often hear from Venture Capital firms and angel investors that what matters most is their team. I don’t doubt this to be true at all. However, the question then becomes: What genetic makeup does a team need to be successful?

I believe there are several key components and characteristic that a team must have. These are not requirements, but if I was looking for a team to be successfully here are the characteristics I would look for:

1. 2 founders: Data from Y Combinator shows that teams with 2 founders have a higher success rate than teams with only one found or a higher number.

2. Founder #1: One founder would be completely product oriented. This person would ideally be the developer and the problem that the company would be solving would fulfill a need that this person has. Examples of this include and

Startup Team Structure

3. Founder #2: The second founder would understand the operations of the company. This person would not necessarily have to be a businessman, although he will to define and prioritize the tasks at hand (marketing, legal, fundraising, etc.) and implement these tasks. This person would be in charge of hiring the team and ensuring the organization was run properly. A good example of this person is Eric Schmitt from Google.

4. No Groupthink: Although the company would not necessarily have one leader and be an autocracy, each founder would have a defined role and would own the decision for that area. Group think would not exist.

5. Strong Mentors Who Meet Regularly: The founders would not only have strong mentors, but more importantly would speak to them often. It is very easy to say you someone as a mentor; it is completely different to actually meet with that person often.

6. Experience Building Anything: Startups are very difficult; most teams fail. Most teams fail because of their lack of commitment. I would look for a team that has faced adversity in the past and still come away successful.

The above points are in part a reaction to my experiences speaking to 2 different types of companies. The first is a company with 1-2 technical cofounders who are very product oriented. The product itself is strong but the organization is a disaster; the product can scale but the organization will not. This is particularly the case for organizations that have 2 full time employees and hire 10 interns or part time workers. For these companies, if they cannot find a way that they can effectively and profitable scale their customer base, their company will fail.

The second company I see have individuals who understand how to run a company, but aren’t product oriented. They don’t feel the pain that they are trying to solve. Their products remain a “Want” and not a “Need” and thus their companies plateau early. A company’s success is eventually determined by the value of the product itself.

If I were looking for a startup to invest in, I would look for a combination of both of these teams. I believe they would have the greatest chance of success.