From Olivier Verhage – Kennet Partners (@olivierverhage)
Following on to my last blog on hiring I thought it would be fun to talk about tribes – the “wolfpack” – and why bringing in your former team is crucial to the success of your new venture. Investors often talk about backing serial entrepreneurs, however if you’ve started 5 companies does that imply you are wildly successful? Maybe you’re demonstrating an unwillingness to push through the hard times and so what really matters are the people you worked with before. Are they in for your next ride? And would you want to work with that same team of VPs again?
A successful exit is rarely the result of a one-man band, but instead the team is the most critical component of success. It’s rarely the founder’s first product idea that makes a company successful and since companies pivot and make product changes all the time, a company is dependent on input from the founding team. Everyone should contribute something uniquely and to build a successful team, a founder must be able to listen. Founders can’t do everything themselves. They need to surround themselves with experts, listen to their advice, and let them do their jobs. Some founders think tasks won’t be done right if they don’t do it themselves and start micro-managing. However, everybody knows that you can’t micromanage your people if you want to be on a fast growth trajectory.
Just like any other relationship, successful teams are built on trust and consist of individuals that respect each other. This is exactly why I’d rather make a bet on a wolfpack, maybe even without the original founder included, than backing a serial entrepreneur who did it before but doesn’t bring in his former team.
The name wolfpack goes back to how wolves co-operate during a hunt. What the wolf lacks in size, power and weapons it makes up with collaboration and intelligence. Smaller and less powerful than mountain lions, wolves work together to take down prey much larger than an individual wolf. Another example is that of naval warfare during World War II. The German system of “Rudeltaktik” or wolfpack tactics, did more than any other element to upset the naval balance of power in the Atlantic, bringing Britain closer to defeat than at any other time in either of the World Wars. Conversely, the failure of the Imperial Japanese Navy to develop an effective convoy or “wolfpack” system led to the almost total destruction of the Japanese marine by US submarines.
Building a new team takes time, it can take several months to figure out whether a new VP fits the team and it may take even longer to see the ROI. Building a team by trial-and-error will likely bring a lot of turnover and, especially with senior hires, you want to avoid turnover and bad team dynamics at all cost.
When listening to a pitch, I always ask the founding team about their background and whether they worked with each other before. I would be a little wary if they say they were friends in college, but if they worked together before, that’s often a good sign and it’s always better than not having worked together ever before. It’s common knowledge that companies fail because of #1 product-market fit, and #2 running out of cash. However, a good management team will be smart enough to avoid reason #1 and #2 and so this goes back to startup failure #3: the team. Without a strong team, even the best ideas won’t survive. And remember, it’s easier to shift product ideas to address market demand than building a star team from scratch. So, if you are now thinking about what your next gig will look like, first think about who you’d like to work with. Approach people you worked with before and if that experience was positive, it’s likely that things will take off much faster than with an individual you don’t know very well. Follow the tribe!