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The attempt of this perspective is to give entrepreneurs a realistic glance and a zoom in look at the challenges of creating, building and growing a technology startup. Entrepreneurs need to understand and accept the challenges of launching a startup, gather and re-think from personal successes and failures, sharpen and laser the focus, draft and re-draft a strategy plan, and seek and recruit right-fit talents for the management team. This management team must maintain a laser focus on the mission and align efforts toward the target market that’s parallel to the vision of the company.
To expand on this, one of the first factors in creating a grounded startup company is to put together an outstanding management team. Within the team, it is the CEO’s responsibility to lead in all areas of the business: marketing, sales, finance and technology. These areas are the internal functions that connect to the external forces of the market. The CEO and individuals on the team must have a clear vision of the market landscape. This allows the management team to effectively lead the company into the market. This alignment of effort is essential in moving forward to create synergy and momentum. Advancing progress, thus, creates the momentum that is vital to the success of the business. The team must continuously create and gain the momentum of the market. If not, the business will eventually fall short, devolving into a downward spiral and derailing from its stabled track. Then, it would not matter how much more money or talent is being pumped into the business. Instead, the best move is to assess the damages, cut the losses and learn from the experience.
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The Vital MMM : Management | Momentum | Money
Management, Momentum and Money are the three inner layers of necessity for startup survival. The vital central core layer of a business is the management team. Management, Momentum and Money have their own dependency on chemistry, synergy and cash-flow, respectively. Everything else (other dependencies) transpires from the leadership of the managment team to target and engage in a specific market, seek and recruit right-fit talents, create and monitor team chemistry and synergy, and improve and control cash flow.
Management
Does the team have the chemistry?
The members of the startup team could come together from various relationships. What have seen over the years the members came from being college roommates, long-time friends, family members, work colleagues, and especially like-minded individuals joining forces. Nonetheless, they came together primarily due to common interests and trust. Together these two factors - common interests and trust - create the chemistry within the team. It is chemistry that ignites and shapes ideas, and sparks a willingness to collaborate and achieve common goals. It is chemistry that primarily keeps the management team in harmony and intact.
Momentum
Does the team have the synergy?
With the right leadership team, a startup team can become greater than the sum of its parts. This effect is known as synergy. When members work together cohesively and vigilantly, their results are strong. The opposite effect of synergy is the law of diminishing returns. When the output of work becomes less, a negative effect or slope results. This decreasing output could come from various causes, such as overstraining, overcrowding, etc. The net result is a lower total return. In order to create and sustain momentum, the management team needs to have synergy consistently working in harmony, utilizing energy efficiently and effectively to gain traction in the market.
Money
Does the team have the cash-flow?
Cash is still King! Most startups begin by bootstrapping, self-funding the work and "doing more for less" to develop the initial stage of the company and produce reliable prototypes or products. Typically, at this early stage there is no external financial support to build the company, and its cash flow is limited by the founders and trusted relationships. The lifeline of companies is its cash-flow that fuels the business, and its statement is considered to be the most important financial information and analysis.
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The core team of a startup is accountable for the vision and execution of the company as it grows. The core team should be kept lean to maintain minimal overhead cost and proper management of cash flow. The team will need to recruit the right talents that also fit into the company’s culture and values. For innovative startups, disruptive or not, the management team will need to seek and hire other managers who have some technical understanding of the business and market. Their primarily jobs will focus on the accounting, manufacturing (designing, coding, testing, etc.) and recruiting. This will complete the core team that will build the momentum of the business and work vigorously to pierce the market. Typically, once the business model has taken shape, the core management team can be made up of five key individuals: CEO, CTO, CFO, VP of Sales and HR Manager. However, the total number of talents and positions may vary according to the specific needs of a particular company or startup.
CEO
Primary duties of the CEO!
The CEO of a startup typically wears multiple hats; although, the primary obligation is to the shareholders, customers and employees. The CEO is usually the founder of a startup, but not in all cases. The CEO of a startup is the visionary leader of the company and generally has put the initial capital to begin building the business concept, developing the prototype and recruiting vital team members. The human capital of a business is its key asset, and CEO needs to put best efforts to recruit the right-fit talents into the initial team. In most cases another important duty of a CEO is to raise enough capital from accredited investors or other external funding means for the company three to five year projected plan. The life-blood of a company is its capital, and it seems to never be enough for a young, hungry and thirsty startup. It is the duty of the CEO to understand the challenges of raising capital, and the risks and rewards of fulfilling the business goals and objectives. In all, the CEO fulfills the vision of creating value for shareholders.
CTO
Primary duties of the CTO!
The CTO of a startup and most companies contributes to the strategic direction of the company through its technology offerings, provideing subject matter expert on best leading technologies in the market. In order for the company to sustain its competitive advantages and market positioning, it is the CTO primary duty to guide and deploy such technological advancements into the company’s core competency. The CTO carries internal and external responsibilities to bring new technologies into the company, and is responsible for leading current technical talents to integrate and deploy into the company’s product and service offerings.
CFO
Primary duties of the CFO!
When a startup becomes sustainable with multi-million dollars in revenue, a CFO would be needed full-time to provide leadership, direction and management to the company’s financial plans and practices, including accounting, budgeting, contracting and reporting activities. The CFO generally works closely with the CEO and COO to assess business risks and develop procedures and operations to ensure the company is meeting its fiduciary responsibilities and accounting principles (Generally Accepted Accounting Principles (GAAP)), and law (Sarbanes–Oxley Act of 2002).
VP of Sales
Primary duties of the VP of Sales!
Is the product ready for sales? The sooner the product is launched, the sooner the company can begin to generate revenues. To accelerate the adoption of the product into the market, the VP of Sales needs to forecast revenue goals and build the sales team. The sales functions also includes developing the business process, policies and programs required to maximize sales volume and revenues in a rapidly growing startup stage and market environment. This leading sales position requires strong operational capabilities. Typically, The VP of Sales works closely with the CEO and CFO to prioritize and execute across highly targeted sales and partnering initiatives.
HR Manager
Primary duties of the HR Manager!
In a startup the first priority for an HR Manager’s to-do list is to establish policies as early as possible creating consistency and stability in the young company. The next is determine if the company wants to conduct various screening and testing such as for drugs, physicals, criminal and psychological background checks, and or computer skills for all candidates. The recruiting process starts with a realistic six months staffing plan. Then the management team agrees on job descriptions and legal application forms to open requisitions and begin recruiting the right-fit talents at the right-time. The recruiting process creates a hiring culture, and forming the startup company history.
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The bare essential! In maintaining a lean team the first two (CEO and CTO (or CFO)) can begin creating the company, and when the business offering begins to take shape and establish momentum, others can be added at proper growth points. Though this sounds fundamental it is a major challenge to build a successful startup team that is aligned with the same mindset, goals, objectives and direction.
CEO
Appoint a CEO! A great visionary leader in a CEO position has a keen ability to quickly see how to fulfill internal needs, and access external forces. It is a continuous effort of the CEO to balance the internal and external elements and effectively lead the team and the company. In a startup phase, the environment can change relatively quickly, and it is the duty of the CEO to shift gears and adjust, navigating the business forward toward a clear vision in a dynamic environment.
CTO
Appoint a CTO! The primary duty of a CTO is to assure the technology of the company is sound and innovative. Innovation is a vital component for creating and sustaining a life of a company. The longevity of a company is based on its management, science and technology. Along with management abilities in a startup phase, the technology and services offering will provide the company the vehicle to eventually pierce the market. With an innovative technology product and an outstanding management team, the startup team also need to offer continuously both quality services and reliable technologies. Upholding the quality creates a culture for the company to attract new and maintain loyal customers.
CFO
Appoint a CFO! The primary duty of a CFO is to analyze and manage the company’s expenditures and cash flow, and possibly assist the CEO in raising additional capital. The CFO is the subject matter expert on finance, accounting and investor relations.
CXO
Appoint a CMO, COO, CIO, CXO when the business model has proven itself in the marketplace.
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lead · er · ship : the element of entrepreneurship and becoming a good leader is more about who you are and how you manifest influence verse what you know. It is necessary to have a good quality of humility; nonetheless, a leader of a startup must have vision, passion and the ability to make decision that are based on substantial experience with both failures and successes.
vi · sion
Having a clear, well-defined and communicated Vision!
pas · sion
Fueling the body and mind through Passion!
per · se · ver · ance
Committing to the hard work and long hours, Perseverance!
so · lu · tion
Identifying a problem and offering a Solution!
tal · ents
Recruiting is a challenge, hire cohesive Talents!
com · mu · ni · ca · tion
Offering feedback and channeling Communication!
de · ci · sive · ness
Evaluating and effectively making Decisions!
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It starts with a Vision, but success comes from Execution.
There are a gazillion ideas, and a gazillion steps to take an idea into a reality. An idea can sprout and take shape from one or multiple entrepreneurs. In all, it takes leadership and the entire team to develop that revolutionary idea into a successful and profitable business. An idea must have a clear vision of the future from concept to solution. In between it is all about road mapping and executing through the challenges of creating, building and growing a sustainable business.
With proper road mapping in mind, an idea becomes a vision then vision leads to execution. From there it takes proper road mapping to determine if it is possible to execute the business model with the current technologies, talents and cash.
When coming up with an idea, questions often asked include Where is the pain in the market today? How difficult will it be in the next three to five years? How will the business concept address the pain and offer a solution to the challenges in the market? Beyond and between the initial five years, the market environment may change, and both the vision and the execution of the company may also need to change to effectively best suit current and future demands. Therefore, it is best to continuously research the market using business intelligence from external market data and internal data from user experience. This way the vision and the execution of the business are correctly represented and balanced with the internal functional efforts and the external market forces.
The point is that the Vision of the company needs to be current yet far reaching enough to create barriers to entry, and it also needs to be aligned with the Execution of teamwork in order to pierce, carve and penetrate the market. Basically, Vision and Execution are codependent desires: desire to see and desire to do. Hence, without vision Execution is routinely an act, and without execution Vision is thoughtfully an idea. In simplest form when Vision and Execution are combined there is a clear mission and direction to lead a business venture from point A to point B.
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The content contained here will be updated at anytime, and is provided to share brief insights and provoke thoughts. Always use your best judgment. Every company has its unique pathway to success in creating, building and growing its business.
