OnStartups

Startups: Why What You Build Is Less Important Than Who You Build It With

Posted by Dharmesh Shah on February 14, 2007 in startups management 6 Comments


I’m in the middle of reading “Founders At Work” by Jessica Livingston.  The book is basically a collection of interviews with founders of some prominent software startups.  What I like about the book (I’m about half way through) is that the interviews are pretty detailed and Jessica does a great job of giving the founders enough time to get their thoughts out.  They cover issues ranging from the conception of the idea, team dynamics, investor dynamics, etc. All the things that you’d expect to go on within a startup.  In any case, the book is good and I’ recommend it (it is one of the few ones that has made the OnStartups Reading List.

 

But, this article is not about the book (I’ll plan to write a fuller set of thoughts on that in a later article once I’m done reading it).  This article is about the importance of your early founding team to the likelihood of a successful outcome for your startup.

 

The title pretty much says it all:  I think the idea that you are basing your company on is likely less important than the team that you create to pursue that idea.  Here are some thoughts as to why.

 

Why What You Build Is Less Important Than Who You Build It With

 

  1. The Idea Can (And Should) Change:  I’ve read numerous times that most startups that end up being “successful” will change the idea along the way.  I recall from a Clayton Christensen presentation that his studies indicated that on average startups change their basic idea/business about four times before finally landing on the one that makes them successful.  He actually goes further and says that in order for startups to succeed, they need to be flexible and have the ability to change the idea based on market feedback instead of doggedly sticking to their original plan.  So, the point here is, your initial idea for the startup, as brilliant as it might be, is probably going to change anyways – multiple times.  For this reason, it doesn’t seem prudent to get overly attached to the idea or give it too much weight in the early stages.

 

  1. The Team Shouldn’t Change:  Startups are an exercise in trust building with a group of motivated and competent people.  Unless you have worked with these individuals before, it can take a fair amount of time to do this.  As such, changes to the “core” team of a startup can be extremely disruptive.  I’ve seen more startups fail because of founder conflict, high management-team turnover and other “people” issues than issues with the technology or the idea.  So, picking this early team and making sure you are coming together with a clear understanding is critical.

 

From “Founders at Work”, one of my favorite quotes so far has been from an interview with Joe Kraus, the founder of Excite and JotSpot.  I’ve heard Joe speak and he seems a particularly intelligent and insightful guy.  Joe says:  “People make all the difference in the world.  Venture capitalists would tell you that they’d rather fund a great team than a great idea.  The reason is that if they have a bad idea, great teams can figure out a better one.  Mediocre people even with a great idea can screw it up in its execution.”  I’d further add that mediocre teams may also be less likely to detect a bad idea, so may be more likely to stay on the wrong path longer than they should.

 

In my current startup, HubSpot, the words are ringing very true.  My co-founder, Brian Halligan and I met as graduate students at MIT.  We got to spend a fair amount of time together and learning about how each of us “thinks about stuff”.  Though we have very different backgrounds (his in sales and mine in technology), we both have similar approaches to problem solving.  We like to analyze, dissect, discuss and debate.  We love abstractions and we love to seek patterns.  This approach has helped us with HubSpot, because as expected, the underlying idea behind the business has already changed considerably since the company was originally conceived.  The good news is that we’re able to openly talk about things and not hold any punches.  If Brian thinks I’m wrong, he’ll tell me (with pretty good reasons as to why).  

 

How about you?  Have you found that your startup has needed to change ideas, or did you happen to “get it right” the first time?  What about the people?  Are you still with the same core team or did this end up changing for some reason?  What were the lessons learned?  Would love to hear from you.