After MindTree got off to a great start, Sudeshna Shome Ghosh from Penguin sent me a mail asking if I would write a book for aspiring entrepreneurs using my experience of co-founding MindTree. That is how my first book The High Performance Entrepreneur came about! I am glad I wrote it because it seems to have filled a large gap. Having written the book, I am obviously very keen to learn from others on the subject and constantly look forward to interactions with experts on the subject of entrepreneurship.
A couple of weeks ago, I met three outstanding people at a TiE event in Bangalore – Mohit Bhatnagar of Sequoia Capital, Arjun Erry of Hunt Partners and Mohinish Sinha of iDiscovery.
Mohit initiated the evening with thoughts on start-up composition from the vantage point of a venture capitalist. His focus was on the early state of an enterprise. Arjun picked up from him and spoke on the idea of expanding beyond a core and Mohinish then picked up the relay baton completing the conversation by looking at teaming issues beyond the start-up stage. Let me start with you what I learnt from Mohit.
Mohit was pithy and powerful. He had a seven-fold view on the issue.
1. Balanced teams are better than a lone ‘Rock Star’
Almost every company that ever made it to the “A” list was a start-up of multiple founders. This fact is borne out by 30 years of data. It is hard being a lone Rock Star and take on the ups and downs of a start-up, all the way to it becoming a high performance enterprise. It is a little like rock climbing. “Find complimentary folks, do not go there alone if you can”, says Mohit. He should know.
2. Do not mix up the dining table with the boardroom
This one is about building professionalism right at the seeding stage. Venture Capitalists value a company that “professionalizes the company from early on”. The friends and family inclination in the entrepreneur can actually come in the way of building a company that would scale quickly.
3. Good people get good people
The first ten people will determine the next 100. If the first ten are mediocre, chances are that the next 100 would be mediocre. Don’t make mediocre people decisions, be selective on competency and soft skills.
4. Action speaks louder than words
While approaching a Venture Capitalist, forget the impressive slideshow and snazzy business plan. You are under the microscope on your walk, not the talk. People are looking at subtle signs. So, here is ‘Mr. Passionate Start-Up Man in the Silicon Valley’ with a mortgage on an up-the-hill garage house who says, “If you fund me, I will move back to India and immediately start operations”. Read, “I will jump but please get me the golden parachute first”. This one is a complete give away and is not going to work. You must demonstrate intent through action to get the interest of the potential investor. The investor rather see you move first than seek the funding.
5. Make way for undisputed leadership
Start-ups are about making decisions, right decisions and making them quickly. In many early-state companies, friends become joint-CEOs, founders have what Mohit calls “herd conversations”, and there is inherent awkwardness to bite the bullet on leadership. “Have the hard conversation upfront, pick the leader. Do not take the easy path of not choosing the leader.”
6. Hire better, smarter people
Have the audacity to hire your boss’s boss. Surround yourself with people 10 xs better than yourself. Be the magnet. That is how you build a fantastic team. Entrepreneurs very easily fall into the trap of competing with their own teams, trying to show they are better and feel nervous in the presence of more competent employees. The Entrepreneur’s job is not to show one-upmanship but be able to put together and keep people many times better than himself. That is how you build a memorable team that eventually builds a memorable company.
7. Going global too early is dangerous
Four friends start a company and what do they do? They position one person in San Francisco, another two in London and one in Bangalore. It looks impressively global, but in all probability, it isn’t going to work. Mohit says, “Vision morphs and changes rapidly. It becomes very difficult if founders are spread out geographically. For the first couple of years, try stay together.”
Stay tuned for Arjun and Mohinish for the next post.
In the meantime, Go Kiss the World!