Entrepreneurial success rarely comes from the idea. Instead, it comes from the founding team’s never-say-die attitude and relentless execution.
And a startup can only be as successful as its founding team. When there's rapid scaling up in size and limited resources, the composition of a founding team is especially critical for what I’ve identified as exponential organizations -- or companies that have impact (or output) at least 10 times larger than their peers.
The rapid pace of growth of exponential organizations requires an extra emphasis on a fully synergistic core team. Peter Thiel, for example, told his co-founders (Elon Musk, Reid Hoffman, Luke Nosek, Max Levchin and Chad Hurley) and employees that they should all work together as friends rather than as employees. Not only was PayPal very successful as a company, but the team is now known as the PayPal Mafia, whose members have helped one another on other startups including Tesla, YouTube, SpaceX, LinkedIn, Yelp, Yammer and Palantircompanies that today have a total market capitalization exceeding $60 billion.
While synergy among founding members is important, diversity within the core team is crucial. I’ve identified the following critical roles for founding teams that are seeking exponential growth:
1. The visionary and dreamer.
The visionary is the primary role in the company’s story. This role is usually performed by the core founder with the strongest vision and a higher, aspirational purpose for the company. For exponential organizations, this is the "massive transformative purpose," which aims to capture the hearts and minds, imaginations and ambitions of those inside and outside the organization.
The position statements of exponential organizations include declarations of purpose that might have seemed outrageous in years past. Take Google’s, for example. While the intention to “organize the world's information” may have seemed impossible many years ago, the company has made it a reality, becoming a multibillion dollar business in the process.
Visionaries not only come up with the purpose for the company but also will hold the organization to it.
2. The customer champion.
Every company has end users. For example, Airbnb has guests and Uber has passengers. To achieve success, startups should develop a user experience role, someone who is purely focusing on users’ needs and who ensures that every contact point with a consumer is as intuitive, simple and clear as possible.
Many recognizable exponential organizations have made user feedback an integral part of their company. Airbnb hosts and guests fill out evaluation forms. Taxi disrupters Uber, Lyft and Sidecar encourage clients and drivers to rate one another. And the news platform Reddit invites users to vote on stories. Having someone attuned to user feedback allows for continual improvement based on the market’s needs.
3. The innovation architect.
In industry after industry, the development cycle for products and services grows ever shorter. And just as was the case with the shift from film photography to digital photography, now that the process is moving from a material, mechanical basis to a digital and informational one, the match is lighted for an inevitable explosion.
This makes programming and engineering more crucial than ever for tech startups. Ensure that there’s a programming-savvy member on the founding team responsible for bringing together the various technologies required to build the product or service. Beyond ascertaining that the startup’s technology is viable, the programmer or engineer is also key in identifying new ways to leverage technology and information to create a unique and sustainable advantage and business model.
4. The rainmaker.
A startup can have a strong vision and team members with technical finesse, but neither matter if the product is not viable. Venture captialist Bill Gurley recently remarked that the “burn rate,” or the amount of money that startups are willing to lose to grow their business, is the highest it’s been since 1999. This increased burn rate can lead to failure, making it imperative to have someone serving in a dedicated financial role.
The person playing the financial and business function within a founding team assesses the viability and profitability of the organization, which is key for interactions with investors. Above all, the person in this position is also responsible for managing the all-important burn rate, ensuring that the team doesn’t peter out before the company gets off the ground.
Having a unified, yet diverse, founding team is the first step toward achieving exponential growth. Venture capitalist Ben Horowitz, co-founder of Andreessen-Horowitz, noted the importance of shared passion in his recent book, The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers: “If founders are in a startup for the wrong reasons (money, ego), it often degenerates into a nasty situation.”
Founders must be intrinsically motivated self-starters who deliver independent thought and possess complementary skills. They must have complete trust in one another’s judgment in the face of rapid growth and change. After all, a startup is only as strong as its foundation.