The Killer Startup Team
Quotidian Ventures’ founder, Pedro Torres Picón, on the overlooked value of domain expertise
In today’s startup marketplace, we tend to overvalue founding teams with experience building technology products and undervalue teams with domain expertise.
I read this quote with interest yesterday because domain expertise is usually discounted by startup teams. Not every startup needs someone intimately familiar in an industry and quite a few startups have been successful despite a lack of expertise on the team. However, in many situations, having depth of experience and know-how can be a critical. Domain expertise is the ultimate an unfair advantage as Mark Suster put it succinctly.
What I enjoyed about Pedro’s article is the recognition of the value of the domain expert to startups. I agree, particularly given the fact that picking up the nuances of an industry and building up credibility is something that cannot be simply fast tracked. You have to spend some time in the trenches. If you were creating a trading app, you would be hard pressed to build one that would work for traders unless you worked on a trading desk. If you wanted to build an onsite mobile app for construction workers, how would you know what to build without understanding how construction sites operate? Sure you could ask users, but without the background of experience, you would miss the details and the exceptions and the things that most users themselves fail to notice or mention. Why? Because it is innate to how they work and it becomes second nature.
The problem is that the domain expert alone is usually not equipped to launch a startup. They lack the experience in building tech companies from the ground up. People in the technology industry building a startup to serve the tech industry generally have a built-in advantage as they have the industry know-how and the technology skills. However even those in the tech industry lack one important skill set.
The killer startup team is one that combines tech skills with domain expertise with operational gumption. Sometimes people with those operational skills are referred to as “hustlers” or “jack-of-all-trades”. In many ways, these are the prototypical entrepreneurial profiles, folks that may not possess the know-how per se, but can identify an opportunity and quickly find ways to make something happen. In essence, they have the attitude and skills to turn an idea into a startup into a real business. Even if they are not the person that seizes the idea, they are able to contribute in measurable ways during the formative stages of a startup. Combine this disposition with either technology skills or domain expertise, and you have the makeup of a formidable entrepreneur.
Startup specific skills are not to be discounted. That is partly the appeal of accelerator programs which attempt to instill those skills in entrepreneurs in order to mold them into efficient operators. Business building is not only about the product. There are the basics of business formation, recruitment and hiring, managing outsourced arrangements and contractors, customer acquisition and retention, cash flow management, capital raising, contracts and legal, and even leadership. Some of these skills are nuts and bolts and some are more intangible yet just as critical when you begin to scale up the startup. It is difficult to keep all these balls moving however when you are also designing and coding the product. This is one reason why most people discourage entrepreneurs from launching a single founder startup. It is simply too hard to do everything well and execute at a high level under such stress.
Most think of the ideal startup founding team as two people; a technical founder and a business founder. There are certainly teams where the tech, operational, and domain are rolled up in two people. But often there are times when that is not the case. The tech and business founders could benefit from that third individual to compliment and complete their team. Sometimes it is a domain expert and sometimes it is an operator. When you have all those skills working together on a team that is tightly focused on a single vision, that is the makings of a killer startup team.
(via rickwebb)
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I read this quote with interest yesterday because domain expertise is usually discounted by startup teams. Not every...
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