During the selection days at Rockstart Accelerator, many teams have been under the judgement of mentors, investors and experienced entrepreneurs. So far we all agree on execution being the most important element for any business, which is directly connected to the team. This makes teams the most important component in a startup in its early days. Yet many people judge teams only by the level of specialization, or even expertise, while drive or adaptability are often left in secondary places. It’s the battle between generalists versus specialists.
A common misconception is that specialization leads to higher productivity. We believe experts have deep and narrow expertise that brings certain quality to their outcomes. But for startups productivity is measured in different ways. Young companies are still searching for that scalable and validated business model, even years after they start. Therefore productivity is linked to the findings on their startup quest. This doesn’t mean quality in specific knowledge fields is not important. It just takes a role in later stages.
For example, a great salesman knows how to build stronger relationships and get higher close rates with customers. His years of experience have made him a specialist in his field. So there’s a big chance that he will see and judge the world based on his previous years of hard work. This can make it harder to jump straight to learning new skills like coding or design, for instance. Furthermore, the motivation to learn something totally different is seen as a cost of opportunity for his career. That’s why we get masters and build a career with the hope to reach certain position after years of hard work in certain field.
Technology wise great code is needed when you are growing considerably and thus scalability becomes a concern. However in the early days the ability to find shortcuts and think outside of the box helps founders to be versatile to unknown and changing environments. Although there can be exceptions, like technology innovation being the core of the business, still for most internet/tech startups doesn’t matter how ugly the code looks from behind as long as you are making your first customers happy.
Startups have very limited resources. The biggest asset is the team and most likely it’s a small one overloaded with tons of work. Founders are involved in all areas of the company, especially in early stages. They need to have an overview of what is happening, so most areas can’t be outsourced that quickly. “Founders wear multiple hats at once and gradually they take them off”, says Dave McClure from 500 startups accelerator. Sometimes it’s even about do it yourself to save the precious cash and being less dependent on third parties. In the other hand, large founding teams (4+) are quite unstable and have big communication costs, apart from being the biggest dilution ever.
This means that not everything can be covered by experts when starting a company. That’s why founding teams, or entrepreneurs, shouldn’t be specialists but generalists. They have hands on the daily activity and are open to learn whatever is needed to bring the company forward. Startups have an unpredictable journey and, like chameleons, they must adapt to the environment. If the business is highly technical and requires certain level of expertise then at least the CEO or the running entrepreneur should be a generalist.
What does matter most in the beginning? Finding a product that has a market. For this, founders will experiment, fail and learn. To take this challenge they need to be flexible. So when judging founding teams we should be looking for generalists that are quick and enthusiastic learners that could solve problems in situations in which they often lack of experience. Founders should be looking for a dirty product just to prove a market. Once with a validated product, and the proper funding or early revenues, founders can start hiring specialists to bring the quality needed in certain areas inside their startup.