OnStartups

Startup Founders: You Don't Need A World-Class Management Team

Posted by admin_bnb admin_bnb on June 1, 2006 22 Comments


As entrepreneurs, I think too many of us are focused on recruiting the best management team possible for our startups.  This is seen as the path to fame and fortune.  This concept is reaffirmed by investors that continually remind us that one of the most important things in a startup is a “world-class management team” (the other is a large and growing market).
 
I disagree with this.  I don’t think you need a management team at all.  You need an execution team.
 
Recruiting a management team assumes that you have things to manage.  I don’t know about your startup, but in mine, there’s not a lot to manage yet.
 
  1. We don’t have a need to manage sales.  We don’t have a steady flow of interested customers that are looking to give us money in exchange for use of our software so that all we really have to do is hire someone to “manage” this.  I’ve said this before.  We don’t need a sales manager, we need sales.

 
  1. We don’t need someone to manage the development process.  We need someone to that is fanatically focused on writing great software.  We don’t need a development manager, we need developers.

 
  1. We don’t need someone to manage our customer support.  We need someone to support customers.  

 
You get the idea.  Basically, in the early stages of your startup, everyone should be focused on execution (including you).  You need movers and shakers and roll up their sleeves and get things done kinds of people.  Code has to be written, sales have to be closed and customers have to be supported.  In the early stages of a startup, the ability to sit back and strategize is a luxury that has to be earned.  Don’t get me wrong, you want smart people that are thinkers and analyzers.  But, it is even more important that they are passionate workaholics that just cannot be satisfied unless they’re doing “real work”.  These are not mutually exclusive.  The best startups have a team that can both strategize and execute – with an emphasis on the latter during the early stages.
 
Before you hire that slick VP of Sales that you met at a recent conference, ask yourself whether this person expects to close deals – or to manage a sales team?  It doesn’t matter if she can close deals or not – if she doesn’t want to be selling, and wants to instead to be managing, she will be ineffective.  You need sales, not someone to “manage” sales.
 
Before you recruit that VP of Product Development from the XYZSoft, that large, successful software company down the street, ask yourself whether he wants to write code (i.e. build the product you need), or whether he expects to use his experience to recruit and manage a development team that would then create the product.  You don’t need a development manager, you need a developer.
 
I’ve seen too many startups with “world-class management teams” that couldn’t actually build a product, close a deal or solve a customer problem to save their lives.  Everyone was too busy figuring out the best sales strategy, the most effective market positioning and the optimal architecture for their product.  But, at the end of the day (or the quarter, or the year), they had nothing to show for their efforts.
 
If you are bootstrapped and running a “capital efficient” company, don’t get lured by the temptation to bring on the world-class team too early.  You can’t afford it.  And, if you’re venture-backed and have a bunch of money sitting in the bank, use the capital wisely to actually build something useful, solve a customer problem and sell it so that you don’t have to keep going back to the well.  
 
My basic point:  Customers pay for solutions that solve a problem they care about.  They don’t pay for strategies, marketing plans or software architecture diagrams – regardless of how clever they may be.  More startups die from their lack of ability to get something meaningful done than their lack of a strategy or world-class management team.   No amount of clever strategy will overcome the lack of execution.  So, what has your management team done for your customers today?