Your team is one of the most powerful resources your start-up has, but too many start-ups don’t recognise the opportunities their co-founders present to business growth and revenue, says international start-up expert Dr Jana Matthews.
With applications open for the fourth intake of the ANZ Innovyz Start accelerator program, Matthews spoke to StartupSmart about the most common misconception entrepreneurs have about growth.
Teams of two or three are most likely to succeed
Matthews says founding teams form a very important role in setting the pace for future growth. She says the best number of co-founders to aim for is two or three, as one is too limiting and any more than four diminishes your start-up’s agility.
“Founding teams play a very important role in a company’s ability to move from start-up to growth. A team of one person tends not to grow. Teams of four or more make lots more pivots because there are more potential points of disagreement about the company’s mission and vision,” Matthews says.
She says the best option for a fast growing company is a co-founding team of three. One focused on technology, one on marketing and sales and the third on managing the operations and finances of the business.
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Co-founders should be mindful of how they work together from the very beginning, as their dynamic will shape the company they’re building.
“It’s really important to have the right mix, and team fit. The idea of culture is also hugely influential on how a start-up team will interact, and on the type of success they will achieve,” Matthews says, adding successful start-ups are under too much pressure to waste time squabbling.
“Those who have figured out how to deal with conflict and differences of opinion, how to give each other constructive feedback, who make decisions quickly and execute are the ones that succeed,” Matthews says.
Use your team and focus product fit, rather than the product itself
One of the benefits of founding teams of three is more empowered voices during product development.
Matthews says a range of experiences, including some previously working together where possible, are one of the most valuable assets founders bring to their product development.
“One of the biggest mistakes entrepreneurs make is thinking that success is dependent on creating a ‘killer’ app or amazing product. In fact, success is dependent on getting the right product/market fit,” Matthews says.
In the accelerator program, Matthews advocates the founders spend as much time as possible discussing their ideas with potential customers to understand what they really need.
“I keep asking the companies to tell me what problem they are solving, who cares, and how they plan to reach the people with that pain point. We try to avoid developing solutions in search of problems. I like to begin with problems that real people are having,” she says, adding that developing personas can be a helpful tool for this process.
Matthews says this is especially important for tech start-ups, where the founders can be focused more on building than on validating.
“Companies that don’t continue to search for the right target market fit, for the right channel to get to that market, for the features and benefits those customers want, run out of time or money, or both – and fail,” Matthews says.