This is my second post stemming from a rich panel discussion on which I participated recently for Fern Mandelbaum’s class at Stanford’s Graduate School of Business, “Entrepreneurship from the Perspective of Women.” As part of this panel, Professor Mandelbaum asked us to share with her class how we think about choosing a founding team, determining the equity split, and attracting and maintaining a great team. In my first post, I shared my four filters for choosing co-founders. In this post, I discuss my views on the three characteristics that team members must share in order to be a truly great team. These characteristics are:
- SMARTS. A lot of people think this means technical book-smarts, but I learned the hard way that it mean something else. The best kind of smarts for team members to have is the kind that helps them recognize what they’re good at versus where others would function better. Knowing when to delegate what and to whom ties into smarts, too. Smart also means making decisions based on limited information. People who have top-notch academic credentials may or may not possess these qualities that are necessary for entrepreneurs. I learned this lesson the hard way in one of my companies.
- INTEGRITY. If every single team member doesn’t have this in spades, it’s a show-stopper. Don’t even bother going further. Integrity is the starting point of any relationship. Your founding team will be sharing a bank account and a great deal of responsibility. You’d better feel these other people share your positive sense of ethics!
- GUTS. As a founder, you have to be fearless in business. There will be times when things are incredibly difficult and you want to run away. At Octane, an early CRM company where I was a co-founder and the SVP of Products, I was a single mom who had the guts to walk away from my previous stable job at Siebel Systems, leaving lots of equity on the table, in order to take a risk with a start-up. Your founding team needs to be made up of people who can go with their gut and who are not driven by fear of failure. Failure is always one of the possible outcomes. It is assured for those who don’t even try or, even worse, who get cold feet when the going gets tough — which it inevitably will at a start-up, even at those that become wildly successful. If you don’t have the stomach for it, don’t do it, or you will let your team down.
No matter what kind of company you launch, it is essential that the characteristics of your team are those which resonate with your personal and professional values. There is no way to learn smarts, integrity, and guts. These are things that your team members must have. If they don’t, they shouldn’t be on your team at all.