This is the forth post in a series on developing a good business model for an early stage company.
Here are some additional points to consider when structuring a management team:
c. Beware of Scientist Syndrome. This is a business model killer. It is especially apparent in technology and science based businesses, but you see it in all types of professions and industries. Is the goal of the key leader to advance the technology or to develop a profitable business model? Is the goal of the key leader the approval of industry peers or company profit? Often what the key leader says and what is the underlying value system underneath the skin are two different things. Assess this carefully. If the goal is to advance the science, business strategy and financial decisions will be made that are not in line with the best interest of the company. I have seen many companies fail due to this.
d. The key leader must listen and heed the advice of the other leaders. Probably enough said, but if you have key leader who will do what he wants to do, regardless of the advice surrounding him, a cultural issue will develop and the management team will begin in-fighting. I have seen companies as young as two months old die because of this.
e. Know what areas of expertise must be covered by management team. This ties back into the first point from the last post in this seeries on needing others on your team. Where that point focused on each member of the team must having a strategic purpose, this point refers to the strategic requirements of the company being represented on the management team. If the company is a B2B SaaS provider, for instance, the company will probably need a developer on the team. That key developer may not be, and probably should not be, the key leader of the company, but there is a strategic purpose for having the company control development rather than outsourcing. Each company should have someone with sales experience. I see a lot of tech companies organized by scientist/developers and financial folks. That is great for building the product – but someone needs to get it to the marketplace. There is no such thing as “build it and they will come”.
See also:
Entrepreneurial Law – Developing a Good Business Model – Part I
Entrepreneurial Law – Developing a Good Business Model – Part II
Entrepreneurial Law – Developing a Good Business Model – Part III
Funding Law - Know Your Assumptions
Funding Law - Plan Your "To Market" Strategy
Here are some additional points to consider when structuring a management team:
c. Beware of Scientist Syndrome. This is a business model killer. It is especially apparent in technology and science based businesses, but you see it in all types of professions and industries. Is the goal of the key leader to advance the technology or to develop a profitable business model? Is the goal of the key leader the approval of industry peers or company profit? Often what the key leader says and what is the underlying value system underneath the skin are two different things. Assess this carefully. If the goal is to advance the science, business strategy and financial decisions will be made that are not in line with the best interest of the company. I have seen many companies fail due to this.
d. The key leader must listen and heed the advice of the other leaders. Probably enough said, but if you have key leader who will do what he wants to do, regardless of the advice surrounding him, a cultural issue will develop and the management team will begin in-fighting. I have seen companies as young as two months old die because of this.
e. Know what areas of expertise must be covered by management team. This ties back into the first point from the last post in this seeries on needing others on your team. Where that point focused on each member of the team must having a strategic purpose, this point refers to the strategic requirements of the company being represented on the management team. If the company is a B2B SaaS provider, for instance, the company will probably need a developer on the team. That key developer may not be, and probably should not be, the key leader of the company, but there is a strategic purpose for having the company control development rather than outsourcing. Each company should have someone with sales experience. I see a lot of tech companies organized by scientist/developers and financial folks. That is great for building the product – but someone needs to get it to the marketplace. There is no such thing as “build it and they will come”.
See also:
Entrepreneurial Law – Developing a Good Business Model – Part I
Entrepreneurial Law – Developing a Good Business Model – Part II
Entrepreneurial Law – Developing a Good Business Model – Part III
Funding Law - Know Your Assumptions
Funding Law - Plan Your "To Market" Strategy
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