Tech vs Tech enabled startups — survival and team formation early days !
How to think about what category of product your company falls into that will help you in not only determining what type of talent to hire but also in making key decisions in early stages of the company formation.
Precursors
- You have identified your skills and strengths and wanting to make use of it — for the betterment of some crowd. AND
- You have a purpose for which you can put to test every waking hour you have, even if that means acquiring new skills, shameless beggings to secure money and you embrace failings, learn fast from them.
- You want to make a business, create employment and you are a leader who listens.
The technology product companies are formed under two circumstances,
- Founders beleieve that there is a problem that can be solved in a better way and they are willing to get access to customers and domain experts to make that happen. OR
- Founders are presumably experts in the specific field of tech and already have access to other experts, tech and academia. The area of knowledge is also their trait and they can put forth the vision and align an entire organization to that vision.
Two categories your product line would fall into
Either you will be evolving the methods and provide tools as part of your product line e.g. Stitchfix evolved how people would style and fit their wardrobe. Or you will create a new category of customers and applications because you believe its possible to deliver something from your dreams, something phenomenal wit a lot of push on science and technology — Think about Smart homes and IOT and different protocols and algorithms that made it happen and offcourse we know about the desktop PCs and phones in the pocket and the tech that made everyone connected and trackable :)
There are companies like Microsoft that falls into both of these categories — On one hand their applications are enabling people and evolving the ways to do office management and stuff, on the other hand Microsoft is also a technology company for its product lines like XBOX and Windows Operating system and HoloLens and such. They also started primarily in one of the above categories — as a technology (not the tools) company.
I am making an effort here to separate these two sides or ways in the mental model in terms of how to handle each one of these companies in early days. My experience is both sided, I have worked on big and small, tech and tools and services companies that have done it well. I have seen big failures inside big organizations and small successes in smaller startups that made them big eventually. I have seen sold-outs, aquisitions and reorganizations under the name of efficient operations.
May be it helps a bit to bring in the clarity in early days in terms of where your org is headed and then form a kickass team. My attempt is to get you thinking about how your organization should go about taking one side strong in initial days and eventually, take on both sides (tech and tools) to endure.
Examples of Tech, Tools and Services companies
I essentially chose a variety of them, to get you thinking and explore more.
Ford : bringing tech to masses, innovating along the way.
Staples : Marketplace for office supplies, not a product company, its serving a category of people.
Slack : providing tools to already existing category, passion for productivity.
IBM : Tech for the businesses, creating new categories.
Google : started as tech, evolved into both tools and tech.
Education.com : Passion for serving existing category and investing in creating new ways and tools for them.
Citylab.com and magazines : neigher tech, nor tools, it’s mainly catering to a category of audience.
Best Buy : Service company, not a product.
Humu : Tools for a category of people, say HR, employees
Dice : Tools for a category, HR and hiring managers and employees.
Orbital Insights : tech and new category for imagery analysis for stocks and business prediction.
Planet Labs : Tech and new category.
Autonomous Vehicle Startups : Tech companies.
Walmart — Service company converted into tech, still serving a cause.
NVIDIA : Technology company, created new categories.
Intel : A tech company, creating and serving new categories.
Given above samples, it should give us enough idea on what your company would become and how to think about it ? Whether you have a category of customers you want to serve right away thru tech ( think rideshare, carpools, nanny hire, linkedIn, online education) or you are a believer that your teams would create a bunch of technical inventions as a first step to solve a world problem in a long run, they both share the same eraly challenges — access to funds, managing the burn rate and creating fundamentally strong team.
To cater to the ambitions in humanity and solve world problems you need to access to tech leaders to achieve just that. In another type i.e. to serve a category of customers right away, you want the fearless leaders, some jacks of all traits, shameless prowess to pitch your ways to money and domain experts.
Tech company : Team formation guide
- One of the founders with substantial experience (not just the knowledge) in the tech that you are set to disrupt.
2. A supporting team that is dedicated enough — They are essentially mature, humble and hardworking, dedicated on personal level,connecters, enablers, they got your back for all things — this is your recruiter, finance, staff support, admin people. They are in it for the people !
3. Ties in the industry — building tech is not cheap as compared to building a website, app, prototype that can prove the traction. However, in the tech startups, I believe you can fail only if :
a. Not having enough blessings from the community of tech leaders.
b. Short term interests of the team to get returns on the “startup” bet they have taken.
c. People are not in there because they believe this tech will change the world in better ways.
d.Leave the game too early (think early inventions not ripe for their times)
e. Overspend on the research rather than creating a category.
Good news is , a good balance of naive freshness of engineering talent and mature tech entrepreneurs in your team can save you — think about the leadership of people who have proven to themselves that tech bets are worth it !
You need followers, believers, mentors and a good psychological vibe in early days when there is no tangible thing to show off.
Setting expectations
When creating such team, you definitely want to set yourself for a longer mission and make teams’ expectations clear about it.
Creating balance
Be also wary of the fact that not a enough balance of research and “product in customer’s hand” can also burn out the cash and resources.
Crafting piece by piece and be ready to ride without the brakes
While your engineers make a craft that can also earn few patents, we wish that it’s just a game of patents, but its not ! You need to have customers to even prove that your craft has a merit.
Your business team should all be responsible of exploring unknown territories and package the craft and push, ship it, shelve it somehow on the potential customer’s stock and fun does not end there — You still need numbers. every new customer is a ride without the brakes on high way.
Caring about numbers
In tech startups, numbers are not about ROI, customer acquisitions initially, but it’s about accuracy and efficiency and comparisons of different methods to the acute scale to the finest details. Fill in your field staff with those minute details.
Ultimately, everyone in your team is in tech for real, hopefully you are not selling subscriptions and having to host the step by step guides and run a facebook campaign. You know what I mean ? Hire those smart people who understand and come from a background that proves they will do a good job selling research that nobody wants to use right away!
