I’ve built at least 8 teams throughout my start-up career. The teams have ranged from unpaid college interns, to friends from college, to contractors from elance. I’ve learned something new each step of the way as I’ve hired and fired professionals. These are the top lessons that I’ve learned while building teams.
1. Money cannot be the #1 goal
In 2010, I built a team where our goal from the outset was to make a lot of money. We didn’t care about changing the world or doing something that we loved.
And we hit our goal. 6 months into our company we had closed 2 big client deals and built an online store that generated over $5k in revenue a month for us.
But unfortunately, because my team members were focused on making money now as oppose to growth for the future, they chose to withdraw money to their personal accounts instead of reinvesting the money back into the company. If we had chosen to reinvest the money, there is no doubt in my mind that we could have seen a 10X return on our initial investment. Instead, we decided to part ways and sell the company prematurely because our team was unaligned from the very beginning.
2. Skills must compliment
At my current start-up, the core team consists of a CEO, CPO (chief product officer), and a CMO (chief marketing officer). The team compliments each other very well because the CEO raises funding, the CPO builds the product, and I sell the product.
I’ve seen teams consisting of 3 MBA graduates fail because they lack complimentary skill-sets. Sure they were all very well educated and smart business people, but they ultimately failed because not one could code or design.
When building a team, make sure that you have members whose skills compliment each other. For an internet company, the ideal team is a business person, designer, and developer.
My latest project is an online boutique. When I built my team, I found a developer, designer, and online marketer. Because each member compliments each other perfectly, there is no overlap in work and they are each able to excel in their area of expertise.
3. Must have industry expertise
My first start-up was straight out of college. Our goal was to build a virtual world that makes this world more productive – the anti-Second Life. We had a team consisting of 2 business guys and 6 engineers. We were ready to take over the world!
Unfortunately, none of us had virtual world experience. None of our engineers had ever built something so complex, and our 2 business people (me included) had no gaming experience.
From this experience, I learned that you always need to have someone on the team with experience in the industry. It gives you credibility when raising funding and gives you the head start in the start-up race instead of starting from zero. When building your next company, make sure your team consists of people with experience in the industry you’re going after.
4. You don’t always need to hire the best
I know, this is the opposite of what everyone says.
In start-ups, it’s very important to get the best in the world for your founding team. However, when it comes to your first employees, I found it’s most important to find people that can follow orders and execute.
There is a thing as having too many cooks in the kitchen.
A lead chef needs a right-hand man that can follow the recipes to perfection and get the job done. In start-ups, the founding team needs people who are the best at execution and can get the job done.
When my team and I were selling the first version of our product, I hired someone to walk door-to-door with me and sell to local merchants. At that moment, I didn’t need the best salesman in the world, I needed a guy who would not take no for an answer and keep selling to local merchants no matter how long it took for them to close.
A start-up that executes wins.
The team is the most important part of the start-up. With a solid, complimentary team that executes, anything is possible.
Jun Loayza is the Co-Founder of RewardMe, a digital rewards program for restaurants and retailers. In his entrepreneurial experience, Jun has sold 2 internet companies and lead social media technology campaigns for Sephora, Whole Foods Market, Levi’s, LG, and Activision. On the side, Jun helps his girlfriend run an online boutique.