An Entrepreneur’s Dilemma: Building the Right Management Team

You started your dream business. You have worked for years for a minuscule salary, doing every job possible in the company. You got your best friend to also work for a song because she believed in the product, believed in you and believed that her equity share would be worth something someday. You tapped into every person that you knew who would mentor you for free and attended every networking event to meet that next connection. And you have been having a lot of fun along the way. Sure it has been hard, but you have set the culture and vibe. By the way, you have done this with a few loans from your angel network and as such you are in control of the company’s direction. You are supremely happy that you are not reporting to “the man.”

How do you figure out who to add to the team, when to add them, and how to pay them? Tweet This Quote

That is all well and good until the day that you wake up realizing that this company could be more. A lot more. “More” could mean impacting lives or creating major change or just making you and your best friend rich. Regardless, in your foggy dream state, you are thinking that your free connections just aren’t going to work to tap into the “more.”

So how do you figure out who to add to the team, when to add them, and how to pay them?

Let’s start with the “who.” This will be the hardest part of the exercise because you need to put your ego aside and be objective. Make three lists:

1. List all the skills that you and your best friend possess.
2. List all the stuff that you two hate doing and/or are bad at. Be honest about this assessment. It isn’t a poor reflection on you; it is the foundation for understanding your capability gaps. These gaps are the things that will prevent you from tapping into your “more.”
3. List all the things that need to be done to accelerate your company. Don’t know all of the things? That would be a big gap that needs to go on that second list.

Now compare the lists and see what work needs to be done and what you two can and can’t do. Next give your best guess as to the staging of each item and the time or longevity required to do each task (this will guide you as you tackle the “when”).

As an example, let me share the story of a start-up that just hired me as the CEO. Nathan, the founder, created an amazing high-nutrition, food product. The product had much technical work that needed to be done and so he first brought on board a food scientist. Now, realizing this food scientist would only be necessary in the early days of the product, he brought him on as a consultant. He next contracted an experienced events marketing guy to get the product out and in the mouths of consumers. He needed to verify that the product was appealing to consumers. Again, this guy was brought on as a contractor to ensure the idea had legs. He also contracted with a sales professional to get distribution on the product. Note that all of his commitments were temporary to assess his real needs.

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All the pieces were coming together with a great product and enthusiastic response from all who tried it. But how does the venture scale? Nathan’s first full time draft choice was an operational expert with deep co-packer management experience. That was critical to getting the product up to commercial grade. The two of them worked about six months together and then it was clear that the product was ready for prime-time. He brought the marketing guy on full time and hired an experienced sales manager with a proven track record in launching brands.

People with the right skills and the right values are out there. Take your time and be clear on what YOU want. Tweet This Quote

With this terrific team of experienced professionals, he made a really big decision. He searched for someone to step in and be the CEO and President. Why did he decide to add another senior person? He has an amazing network of advisors, but you can’t move fast enough if you are asking the opinion of lots of folks on every issue. We call this mentor whiplash at the Unreasonable Institute; incredible mentors will no doubt have different opinions and how do you choose the best answer? Look for someone who can cut through the choices.

That’s when Nathan found me.

Which leads to the toughest part of your journey to build a great management team: how do you get the right cultural fit?

Once you are clear on the skills needed, you will have lists of people to choose from. And lots of people look great on paper. But ask yourself a few simple questions:

1. Does the person (regardless of position) share your vision for the “more?”
2. Do they respect that you are the founder and that you have unique skills that you bring to the party?
3. Would you want to have a beer (or a coffee or a chai or a shot of tequila) with this person after hours?

Trust me. People with the right skills and the right values are out there. Take your time and be clear on what YOU want.

And how do you pay your new staff? Let’s save that for my next blog!