Formulating the Idea
What I’ve found as a CEO that buys companies, and investor in companies, is that most ideas are bad. I try not to be mean when I deliver the news to an aspiring entrepreneur, but I do try to be direct in my feedback as a coaching tool and an opportunity to provide constructive guidance.
Even good ideas can be very immature and need lots of refinement. In my business, we typically say that idea has a lot of “hair on it”.
So what makes a good idea?
- Your product idea is unique and hard to duplicate
- You can build barriers to entry for competition
- You can protect your intellectual property
- There are switching costs for customers
- The market opportunity is big and growing fast
- The timeline to revenue growth and profitability is reasonable
- The potential Return on Investment (ROI) and Internal Rate of Return (IRR) on the investment are both high
These elements can be fleshed-out with a good business planning process. There are many available, but I suggest checking outin Entrepreneur Magazine.
Keep in mind, the more unique your idea, the more difficult it may be to secure capital for your company. However, ideas with a sustainable competitive advantage are essential to a successful startup strategy. This gets to my next point.
Building the Team
Inc. Magazine published an article,. I think it is worth reading, and definitely worthwhile to always continue to learn about best practices to build and manage high performance work teams.
I think about sports when I think about teams. I read an article in, and thought it was great! In most championship teams, a superstar is needed. At the same time, you also need to have role players. And you need to have teamwork, conflict resolution, and great communication. The players that are playing their various roles need to do those jobs nearly flawlessly. Who is the superstar in your space? Is it you? Or do you need to get that person onboard as soon as possible? Can you build a team around that person or group of people that can deliver championship performance?
In startups, a good team can take an average idea and make it good, and they can take a good idea and make it great! Give that idea a haircut! The great teams are experts at that.
When building a team, I look at both the individuals, the team dynamics, the culture I’m trying to instill, and the situation at hand. This is critical for a successful startup strategy. Some people decide to strengthen their team with team-building activities. I had a friend and their team go to The Escapement Margate and found it useful to streamline their communication when it came back to work.
I work to hire the best and brightest people we can attract and afford that are specialists in their discipline. In early stage company, everyone needs to play a critical role, and, in most cases, individuals need to play multiple critical roles.
Sometimes a situation dictates having a specialist that isn’t the best at “playing with others”. It is always a trade-off and needs to be constantly re-assessed, but I believe that launching a great idea is like starting a revolution. If you’re going to start a revolution, then you need anarchists. I have found in my career that many company founders are anarchists. It is the job of the leader to make team dynamics continue to work in this environment.
Generally with teams, you have to set a direction and provide ongoing guidance. I like to think of getting everyone in the same boat, pointing the way, and getting everyone rowing in the same direction. It is awful to see a team that has a boat spinning in circles in calm seas! There will be challenges and “storms” along the way, and the leadership needs to plan for adversity, and provide a steady hand at the helm, so the team can persevere though these times. This gets to my third point.
Execution of the Plan
As a leader of an organization, you need to provide alignment, incentives, and resources to the team. Just as important, you need to have a team that is passionate and believes in the idea. Zealousness is required to make a startup successful. As a leader, you need to look over the horizon and make sure the team has the needed provisions and support to do their jobs. You need to raise a sufficient amount of money to allow the team to do their jobs. There will be challenges and there will be adversity. Forbes had a terrific article,. Check it out!
Your team must have the passion, focus and drive. The leader provides the ultimate direction, but listens to the team, the customers, and other key stakeholders. I call it “enlightened dictatorship”. I have never seen a successful startup strategy that doesn’t have this.
This was originally an answer that I provided on Quora.