Building the Right Business Team

In his book titled The Art of the Start 2.0, Kawasaki claims that recruiting the right people for a startup is both exciting and crucial to the success of the organization (2015, p.173). Kawasaki's comments make intuitive sense. Anyone who has ever been a team captain for a sports team knows the excitement that comes with picking your ideal team, and we know that having the right team can make the difference between victory and defeat. As a requirement for one of my business courses, I was asked to make the case that building the right team is the single most important part of creating a new business plan.  

The strongest reason that the team section might be the most important part of the business plan is that people are the ones that carry out the business plan. A business plan is simply a written document - words on a piece of paper. In a business plan, an entrepreneur may promise to "ship 10,000 units in the first quarter", "minimize operating costs by using lean manufacturing", or "achieve synergy with key manufacturing partners." These are all important goals, of course, but they are also self-evident. Every business wants to lower cost, and every entrepreneur hopes they can hit a specific sales target. Venture capitalists and investors need to see that a business proposal has an innovative product and a potential market, but, above all, they are looking at the management team's ability to execute (McClure, 2019). In other words, investors need to see that the management team has the right ideas, but they also need to have faith that the team can successfully put their plans into action and deliver the outcomes discussed in the business plan.  

Team Qualifications

The Team section of the business plan is not just important to potential investors. It is important to the startup as well. If the startup can not convince the investor that their money is in good hands, the startup will struggle to get the funds it needs and may never even get off the ground. So, how can a startup convince investors that their business is a good bet? Kawasaki gives three questions that startups should consider when building their teams (2015).  

• Can the candidate do what the startup needs? 
• Does the candidate believe in what the startup is doing? 
• Is the candidate likable and trustworthy? 

As I read Kawasaki's three qualifications for hiring the right employees, I realized that the same qualifications that make for a good employee also make for a good bet for an investor. Let's look at Kawasaki's three qualifications one at a time. A candidate who can do what the startup needs has competence. Belief in the company's mission is important because it demonstrates passion. Passion is an effective motivator that assures investors a team is committed to making the business a success and achieving the company's vision. According to Virgin Group founder Richard Branson, passion is also one of the strongest predictors of whether an idea will be transformed into a successful business (2015). Lastly, a candidate needs to be likable and trustworthy. The importance of trust goes without saying. Investors are risking their money and they need to feel confident that the start-up won't misuse the money.  

Conclusion

It is a tough argument to claim that any specific section of the business plan is more important than the others. As I was writing this post, I remembered a saying from the Army that said: "great troops can overcome mediocre equipment, but mediocre troops can screw up great equipment." I have seen soldiers get lost while they were holding a state-of-the-art GPS device in their hand, and I have seen soldiers ace a land navigation course with nothing more than a simple map and compass. The difference was not in the tools, but rather the abilities, motivation, and training of the soldiers involved. The team section of the business plan is the most important because it demonstrates that the startup team will take the tools that the investor gives them and use their ability, motivation, and dedication to overcome obstacles and deliver the results that investors are seeking.  

Branson, R. (2015, February 23). Passion and purpose go together. Retrieved August 6, 2019, from https://www.monitor.co.ug/Business/Prosper/Passion-purpose-together/-/688616/2632832/-/5h8tx3z/-/index.html 

Kawasaki, G. (2015). The art of the start 2.0 the time-tested, battle-hardened guide for anyone starting anything. New York, NY: Portfolio Penguin. 

McClure, B. (2019, March 12). How venture capitalists make investment choices. Retrieved August 6, 2019, from https://www.investopedia.com/articles/financial-theory/11/how-venture-capitalists-make-investment-choices.asp