Final startup grind
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Transcript of Final startup grind
Startups – How to Build Out Your Early Team
Mark Suster
Startup Grind, February 2013
@msuster
Lessons from Both Sides of the Table
Ex software developer (‘91)
BuildOnline (’99)
Koral / Salesforce.com (’05)
VC at GRP Partners (‘07)
Both Sides Of The Table
When You First Start
“Co Founders”
My Priorities When Funding Early-Stage
Team
Product
Market
Why is the Team So Important?
Funding Environment
Funding Environment
Compet
ition
Compet
ition
Customer
ReactionCustomer
Reaction
Ability to
Monetize
Ability to
Monetize
Sta
ff
Dep
artu
res
Sta
ff
Dep
artu
res
Shit happens. Great teams
handle adversity
better
Shit happens. Great teams
handle adversity
betterP
R D
isaste
rsP
R D
isaste
rs
The Co-founder Mantra is a Sacred Cow in Silicon Valley – I Believe It’s Overplayed
http://www.bothsidesofthetable.com/2011/05/09/the-co-founder-mythology/
The Reality is That Over Time Many Founders Fight
Huge Premium for Taking First Leap. Can Hire Cofounders with Large Equity & Keep
Creative Control
But I Know You’re Going to All Want Co-Founders So Just Make Sure You
Understand Prenuptials
http://www.bothsidesofthetable.com/2009/08/18/founders-ownership-and-stock-options/
And Be Careful About Having Too Many Co-Founders: It’s the Largest Dilution You’ll
Ever Face
I Think VCs Care More About Not Having a Single-Point-of-Failure than Exact
Cofounder Founding Situation or Economics
Seed to A
“Building the Early Team”
Configuration of My Ideal Founding Team: CEO Plus 4-5 Engineers
CEOCEO
CTO / Senior
Architect
CTO / Senior
Architect
engeng engeng engeng
Financially numerate Product management Ability to lead / hire
http://www.quora.com/Startups/What-would-the-ideal-web-technology-start-up-team-be-composed-of
Pet Peeves for Me
Don’t outsource your tech development
Don’t have a consulting firm build your core product
Don’t have tons of business people before you have product completed
Don’t overplay your advisory board. (I just care about your investors & management)
http://www.bothsidesofthetable.com/2009/10/12/should-your-startup-have-an-advisory-board/
Don’t Hire People All Like Yourself. Diversity in Startup Teams Matters
Product Management: One of Most Underrated but Important Skills in a
Startup
design / eng
design / eng
Solve functional problems
Architecture
Performance
Which tech stack to use?
Usability / process flows
PMPM customercustomer
Capture requirements
Test value / determine whether customer will pay
Competitor reviews
Prioritizing roadmap
Many Investors Will Tell You to Bring on Experienced Team Early. Don’t.
Hire People Who Punch Above Their Weight Class
http://www.bothsidesofthetable.com/2011/03/17/whom-should-you-hire-at-a-startup-attitude-over-aptitude/
Your First Sales Reps Should Be Evangelical & Consultative (versus
relationship managers)
Not
Not
http://www.bothsidesofthetable.com/2010/10/12/startup-sales-why-hiring-seasoned-reps-may-not-work/http://www.bothsidesofthetable.com/2010/04/08/journeymen-mavericks-superstars-understanding-salespeople-at-startups/
Engineering needs three distinct management skills: people, process, &
technology leadership
http://www.bothsidesofthetable.com/want-to-know-difference-between-a-cto-and-a-vp-of-engineering/
Many Startups Have Too Many C’s. They Are Usually a Fudge For Co-Founders to Feel Good About 1 Founder Becoming CEO
http://www.bothsidesofthetable.com/2011/09/12/why-your-startup-doesnt-need-a-coo/
http://www.bothsidesofthetable.com/2011/09/17/further-thoughts-on-startup-operations/
Functional Responsibilities Help Better Divide Work & Make People
Accountable.
CEOCEO
VPEngineeri
ng
VPEngineeri
ng
VP Product
VP Product
VP SalesVP
SalesVP
MarketingVP
MarketingVP
FinanceVP
FinanceVP
Biz DevVP
Biz Dev
I am reluctant to see “president” or “COO”
A to B Round(when you’re ready to
scale)
Most Founders Get Bogged Down in Minutiae. You Can Get Huge Benefit from
an Office Manager who Doubles as an Admin
http://www.bothsidesofthetable.com/2011/10/28/the-controversial-first-role-to-hire-after-your-a-round/
Hire a VP of Finance – Look for Somebody Who Can Help with Ops, Legal, HR, Office
Space, etc
Board Construction Limit number of VCs on the board
Be very careful about board observers. They are the equivalent of board members.
Limit management officially on the board – makes changes over time too difficult.
You can assign your founder seats to startup ceos if you’re worried about control (you control seat)
Strong industry independents on board – but make them write small checks to be committed.
http://www.bothsidesofthetable.com/2012/08/16/rethinking-board-observers-the-role-of-the-silent-observer/
http://www.bothsidesofthetable.com/2009/10/14/when-the-board-of-a-startup-votes-theres-a-problem/
http://www.bothsidesofthetable.com/2012/08/15/should-you-really-sit-on-other-boards-when-youre-a-startup-founder/
</Good Luck>
Mark Suster
Startup Grind , February 2013
@msuster ; BothSidesoftheTable.com