An interesting article popped up on Harvard Business Review Blog saying “Tech Startups Need Non-Techies to Succeed” which touches upon very important elements startup founders need to think about.
In today’s age where software development is all the rage, and having a tech co-founder is seen as a must, many forget that a great company is not built on the product alone, but rather on a combination of product, marketing, sales, and overall good business planning.
Consider the software industry, where we have successful brands like Windows and Oracle. While these two firms have world-class intellectual properties, I think their true innovation is in the pricing model around their businesses. – Ndubuisi Ekekwe
Yup, the author’s right. At every event or meetup I attend, there is always a handful of startup founders that are building great new social-mobile apps. How are you going to monetize? What is your pricing and distribution strategy? I ask… only to hear “oh, we’ll think about that later, after we raise some VC money”. OK, good luck in going down that path!
Who needs business co-founders?
According to the Startup Genome report, “business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups”. This makes sense, and the report also points out that “balanced teams with one technical founder and one business founder raise 30% more money“.
The fact is, a well balanced founding team is key for success.
While a lot of attention in the software startup is paid to the technology stack, prototypes, and the like, movements such as the “lean startup”, and “customer development” are getting a lot of traction because they bring to technology founders the common business sense they sometimes lack.
Steve Blank‘s customer development process, which talks about the business model canvas, for example, is a typical exercise someone with an MBA would know instinctively. For a programmer, not so much.
Who’s in the team?
There are many views about who should be in the founding team. Dharmesh Shah, co-founder of the successful VC-backed HubSpot argues that first comes the Developer, followed by a Designer, an Inbound Marketer, and a Sales person. Naval, from VentureHacks, has a post about the power of two, a developer and a sales guy.
Enterpreneur turned investor, Manu Kumar, once gave a talk at an event I attended where he laid out his view of the perfect team. He said the founding team should have the following skills: developer, designer, and business. It could all be part of one person’s skillset but this is hard to accomplish, usually there are two or three people representing these skills.
A similar question on Quora has elicited many responses, some similar to what I outlined above, some a bit different.
Some food for thought.