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Chris Coe argues that start-ups should build their teams early and put depth of business experience before all else.
It is well known that investors like to put their money behind people as much as ideas. Therefore, building the right team at the right time is ultimately the most critical factor in determining the success or failure of a new venture. The question is, who should entrepreneurs be targeting to give them the greatest chance of success, and most importantly, how should they go about attracting the talent?
Anyone can have a great idea, but it’s how that idea is executed that makes the difference. Successful evolution relies on brilliant people. And I say people, because one person alone is unlikely to secure an entrepreneur the investment they need, in order to make a success of their venture. Put simply, if you don’t add scale to your team, you won’t add scale to your idea.
Before seeking out series-A funding, entrepreneurs should build their own personal advisory board. While there are many brilliant young minds out there, bursting with energy and ideas, there is no substitute for experience when it comes to giving a start-up the best chance of success. These board members should crucially have experience in effectively scaling up products and teams from concept through to commercialization. If you can present to investors an ex-CEO who has been through all the challenges, who understands the full product lifecycle and all the regulatory hurdles, then market access is more assured and your business proposition becomes significantly more attractive.
The benefits of building a team early aren’t restricted to investors, either. The sooner you have access to quality advice and decision-making, the greater your chances of a fast route to successful launch.
Start-ups like Sapiens and Ultromics attribute much of their success to getting the core team structure in place at an early stage. It helped them to secure the investment they needed and enabled a speedy route to market.
So you have your idea, your advisors and your plan to build a team ready – and now the hard work really begins. How do you persuade top talent to come to a start-up, which is risky and probably paying significantly less than the more traditional, stable options of the corporate powerhouses?
We find that many industry veterans can be tempted to take a risk if they believe they’ll be a part of something really big. That doesn’t simply mean persuading them of the superiority of your product or service (although that is undoubtedly important) – it’s about empowering them see how their experience, gravitas and brilliance will be crucial to securing the company’s future.
An executive search professional can certainly help with this, too, providing an objective yet persuasive argument for the myriad of benefits which a start-up can offer, from flexibility to creativity.
Take, for example, Annalisa Jenkins, the highly accomplished Chief Executive Officer at Dimension Therapeutics, a biotech that was listed in NASDAQ less than three years after founding and ultimately sold to Ultragenyx, where the programs in gene therapy recently delivered exciting results. Dr. Jenkins is now involved with a number of private and public small and mid-cap organizations, in a non-executive capacity. She spent 20 years building an exemplary career in global pharma R&D and secured many achievements and one of the most challenging roles leading Research and Development at a top 15 company. However, the allure of one interesting idea led her to leave a busy but stable corporate life in 2014 and take a risk on a promising newcomer – Dimension Therapeutics. Why? “Because I could see the potential in the science and the opportunity. And I wanted to build the company with a culture and team that I always wanted to work for. Great science and medicine combined with the right team is genuinely exciting and a wonderful place in which to innovate and truly make a difference" she says.
It is also important to treat each position in a fledgling business as a specialist role. Giving people more than one area of responsibility is a very typical approach to help save costs, but this can make it difficult for people to focus, causing burnout and ultimately, it can dilute your resources of expertise.
And, while building a great culture will futureproof your business, don’t fall into the trap of hiring a ‘type’. The most successful businesses are usually those who bring diversity of background, ideas and working approaches to the table.
When it comes time to interview, pitch the company vision first. If a candidate is not excited about this, then you’ll know straight away that they are not going to be right for you. Passion – and a shared vision – is absolutely critical to success.
It can be a mental hurdle for many, but don’t be afraid to hire someone with more experience than you; someone more renowned or better paid. Don’t lose sight of the fact that you are building the dream team who can bring your vision to life.
It’s also important not to dismiss candidates who may have previously worked for a start-up which failed. It doesn’t mean that the failure was their fault; moreover, they will have experience in knowing what mistakes to avoid.
Great candidates are a precious commodity and if you are interested in someone, then you won’t be alone. If you have a candidate on hold, don’t assume there is a better one - you just might risk losing the perfect new addition to your Board. Experienced C-suite professionals in growing fields like MedTech and biotech always have lots of options, so speed is essential. If you leave a candidate hanging, it could detrimentally affect your reputation as an employer: life science is, after all, a surprisingly small world.
And when it comes to salary, it is important to remain open minded yet realistic. Don’t pass on an interview with a potential candidate just because of their salary. Salary is rarely a candidate’s only consideration when deciding whether or not to accept an offer. Neither is equity. Factors such as work-life balance and internal culture are increasingly important to today’s executives.
It is easy for entrepreneurs to fall into the trap of devoting all of their attention to their big idea, thereby failing to focus on the human component of success. The initial investment in human capital may create nervousness, but if there’s inherent belief in the company’s vision, then the risk will undoubtedly be worth it.
Chris Coe is Head of Executive Search at Talentmark.