Launching Profitable With A Fearless Team

Launching Profitable With A Fearless Team

I was recently asked to review a deck for an investor friend. He trusts my opinion on such matters because I have had successful exits and dismal failures with many hard-earned lessons. Looking over the nicely prepared presentation, it became clear that this company was not a good investment.

Impressive Team

The first concern came from the team. Each member had an Ivy League education and experience at one of the famous tech companies. Harvard, Google, Stanford, Facebook, MIT, and Amazon were listed under the glossy pictures of smiling co-founders. However, it became clear that this team had yet to do anything but create a shiny pitch deck.

The Hunger Test

My concern with a team with such accomplishments is that they have options. They can always return to something else if they get bored, scared, or hurt trying to launch a company. Furthermore, each was waiting on the funding to continue their lifestyle while they worked at building the new venture. No one had left their job, tested the market, or developed a product.

Plan B

The best founders have their backs on the wall. Bill Gates and Mark Zuckerberg dropped out of Harvard to build their companies. Jeff Bezos left an incredible job on Wall Street to create Amazon. Steve Jobs was an entry-level developer at Atari with no college degree before creating Apple. For me, I had left software management and turned down a general partnership at a fund to launch my company.

Failures

The great thing about being a founder is that you cannot fail. Sure, you can make mistakes that kill your company, drain your savings, and cause relationship problems. However, the lessons learned can be applied to a turnaround or a pivot. For example, Michael Dell almost lost his computer company before turning things around and realizing how to take it public. Then, for pivots, we have YouTube, which launched as a dating website, and Twitter, which was first Odeo, a failed podcasting service.

Leadership

When investors say they invest in people, they mean they invest in people who are smart, talented, and willing to suffer through hard times. The problem today is that most founders have an employee mindset. They must have funding before they begin because the thought of going without a salary is too scary. However, successful founders work tirelessly on their projects while working part-time jobs for basic necessities.

The Musician Waiter

Eat at a nice restaurant in Nashville, and the person who serves you will most likely be a world-class musician or songwriter. The reason they are serving you instead of touring or working on the next global hit is they are in the process of building that reality. Founders are no different, but for one thing, the myth of funding to provide salary.

What Funding is For

The term scaling a company refers to duplicating efforts by hiring more people. Each person besides the founders requires a salary because each person besides the founders is an employee. The founders should not view themselves as employees for some time. Instead, the team should do everything possible to serve their employees, customers, and investors. This means that leaders eat last.

Conclusion

A founding team should be equal because everyone has no other option but to succeed in this venture. There should be early traction, and the founders should be directly responsible for producing. The product must be created so people will pay to use it. Then, each founding team member must be open to learning while jaded enough to filter advice heavily.