Kicking off a new product? How do you go about finding the right team for the job?
Assembling a team
The first problem is simply finding good people. It can easily take six months to assemble your founding team and get them up to speed; to get them forming, storming, norming and performing. It’s also hard to know what good looks like, especially if you’re a first time founder or from outside the industry.
There’s a mistaken belief that talent is widely distributed and largely equivalent. That one designer, product manager and engineer is much like another. In my experience, nothing could be further from the truth. I’ve seen founders go through multiple design, engineering or product leads before they find the right person. This all costs time and money. Often that’s time and money the founders don’t have.
It’s also worth noting that teams aren’t a static thing. In fact the team you need to invent a new product is going to be quite different from the one you need to scale, monitise and maintain the product. And because there are a lot more companies in the scale, monitise and maintain phases, they’re much easier to find.
So if you’re kicking off a new product, how do you go about finding the right team for the job? I think there are three opportunities available to you that are faster and better than trying to recruit a permanent team.
The first option is to go freelance. To find individuals who have a proven track record inventing and scaling new businesses. These people tend to be pioneers. They enjoy the challenge of solving new problems so probably aren’t looking for a permanent position. They know their worth and will be reasonably expensive on paper, especially if they’re looking for equity.
It will take time to find these people. But if you find a good freelancer, they’ll undoubtedly know other people they’ve worked with and trust. This can help reduce the time it takes them to get up to speed, avoiding the forming and storming phase, and jumping straight to norming and performing.
If you don’t have the time and contacts to build out and manage your own team of contractors, the next most obvious solution is to hire a pre-built team with a proven track record, in the form of an agency.
While agencies may feel more expensive than permanent staff when you consider day rates, you need to add on the time you’re saving by not having to recruit, onboard and bring these teams up to speed. There’s also a tendency for agencies to work faster, so they’re regularly able to deliver in 6 months what would take an in-house team a year or more.
The final option is to look towards a new breed of “sweat equity” investors. Rather than offering you cash, these investors will agree to design and build your product for a share of equity. Like all investors, these companies are taking a huge risk so would typically expect a higher reward. Usually something in the region of 20-30% equity.
This is a really interesting new model, so it could be worth a try. However because it’s so new, it hasn’t really been stress-tested yet. So there’s a chance that the teams may not be as good as they claim to be, but unlike a relationship with an agency, it’s much harder to offload an investor you don’t like. If you are going to go down this route, it’s worth doing your due diligence, and see if they have the track record to back up their equity stake.
Whatever approach you choose, it’s always important to balance time, money and risk. Building an in-house team takes longer, and therefore presents a higher risk. Get it right and it can save you a lot of money, but get it wrong and you’ll hit the end of your runway fast.
Using contact or agency talent helps reduce the time, risk and managerial overhead, but it comes at a cost. The equity funding model is a new and exciting approach, but yet to be properly proven.