I understand the point that he’s making, and in certain circumstances it makes sense, but generally I disagree. Most start-ups have every chip stacked against them except their passion, small team, ability to be nimble and agile, and their ostensible creative brilliance. The chance that you’ll build a product interesting enough to get others to join, either as investors or employees, is really small. The chance that your product will get enough traction that you can make your investors back money (through an exit, or even just revenue) is really, really, really small. Most start-ups fail because they are aiming too low in building their teams, not because they are aiming too high. I was at a company where we needed engineers, so we just hired a bunch quickly, in Russia. Once we hired them, we needed them to sustain our revenue and traffic growth, but we were doing 3AM Skype calls, writing and re-writing site content, constantly translating their UX, sometimes even re-writing code, and back-tracking every time we had a new release, as there were bugs, the design was not what we wanted, and the feedback loop between our salespeople, community people, designers, and engineers was completely broken – to say nothing of the feedback loop between us and our customers. We ended up bringing on some really talented engineers later, once we had raised some money to afford them (Vicious cycle – I need money to build a strong team. I need an impressive product to raise money. I need a strong team to build an impressive product. I need money to build a strong team. Etc.) but they spent most of their time and energy re-doing the shoddy work (architectural, UX, UI – whole new language even) we had used to ‘get by’ out of the gate. Needless to say, we failed. Execution is everything, people always say. What they don’t realize, though, is that team-building is probably THE most important piece of execution early on. Finding the right guy to do the thing you don’t do that well is any CEO or CTO’s constant difficult challenge, but at the start it’s what can make or break a business. And if you can’t convince someone who is tip-top to join you as you build your business, the solution is likely that you need to shore up some of your own skillset first, not that you need to raise more money. Learn how to code. Do some real selling (even if it’s a prototype – heck, sell Amway products if you need training). Prove it. Game recognize game.
And, of course, as a company gets bigger, the focus of the talent pool obviously dilutes exponentially. Once you need secretaries and analysts and associates and boots on the ground of whatever variety, the bottom line is efficiency. And yes, at scale, you can absolutely create organizations where the talent of any individual is immaterial to (or less correlated with) how well-designed your systems are, or how well an organization does. For example, first-year IBD analysts at Goldman Sachs enter with literally no skills, and are paid upwards of $85,000 and create probably $1,000,000 if not more, of ‘value’ each. This isn’t because Goldman only hires A-players (They couldn’t possibly. An A-player is someone who not only has the right boxes checked but also has an ex-factor, and most A-players I know prefer, at the very least, macro-investing and private equity to being IBD analysts at big banks if they are sticking to finance. But really, most A-players I know do whatever they want, and not everyone wants finance.) This is because Goldman’s systems are designed brilliantly. A start-up, however, exists long before that. There is no culture at a start-up until you create one. There are no org structures, or best practices for cornering markets, or ways of maximizing existing revenue streams (which result in innovator’s dilemmas) in start-ups. There are just a few people, with the drive, the willingness to succeed, and the intellectual capital they hope to trade on. Great players in the early-stage entrepreneurial world are STILL grossly underrated, if you ask me.
P.S. – An A-player doesn’t mean a really fast cowboy coder. A-players are team players, at least in the ways they need to be. So that assumption is false anyway.
UPDATE – This is a way better article. Selecting The Best Team For The Startup Gridiron