1. Startups – How to Build Out
Your Early Team
Lessons from Both Sides
of the Table
Mark Suster
Startup Grind, February 2013
@msuster

2.  Ex software developer
(‘91)
 BuildOnline
(’99)
 Koral /
Both Sides Of The Table
Salesforce.com (’05)
 VC at GRP Partners
(‘07)

3. When You First Start
“Co Founders”

4. My Priorities When Funding Early-Stage
Product
Market
Team

5. Why is the Team So Important?
Departures
Departures
Staff
Staff
FF
En undin
En undin r
vvrr
i i oo gg
nm meer
toom n
nmeen
nt t Cusstctioon
Cu a cti
Reea
R
Shit happens.
Shit happens.
Great teams
Great teams
handle
handle
adversity better
adversity better
AA
M bblil
M ii
onn
Disasters
Disasters
tiitio oo tiy
nn ty
ti ee too
PR
eet titi t
PR
pp zeze
m
oom
CC

6. The Co-founder Mantra is a Sacred Cow in Silicon
Valley – I Believe It’s Overplayed
http://www.bothsidesofthetable.com/2011/05/09/the-co-founder-mythology/

7. The Reality is That Over Time Many Founders Fight

8. Huge Premium for Taking First Leap. Can Hire
Cofounders with Large Equity & Keep Creative Control

9. But I Know You’re Going to All Want Co-Founders So
Just Make Sure You Understand Prenuptials
http://www.bothsidesofthetable.com/2009/08/18/founders-ownership-and-stock-options/

10. And Be Careful About Having Too Many Co-Founders:
It’s the Largest Dilution You’ll Ever Face

11. I Think VCs Care More About Not Having a Single-
Point-of-Failure than Exact Cofounder Founding
Situation or Economics

12. Seed to A
“Building the Early Team”

13. Configuration of My Ideal Founding Team: CEO
Plus 4-5 Engineers
 Financially numerate
CEO
CEO  Product management
 Ability to lead / hire
CTO //
CTO
Senior
Senior
Architect
Architect
eng
eng eng
eng eng
eng
http://www.quora.com/Startups/What-would-the-ideal-web-technology-start-up-team-be-composed-of

14. Pet Peeves for Me
 Don’t outsource your tech development
 Don’t have a consulting firm build your core product
 Don’t have tons of business people before you have
product completed
 Don’t overplay your advisory board. (I just care about
your investors & management)
http://www.bothsidesofthetable.com/2009/10/12/should-your-startup-have-an-advisory-board/

15. Don’t Hire People All Like Yourself. Diversity
in Startup Teams Matters

16. Product Management: One of Most Underrated
but Important Skills in a Startup
design //
design PM
PM customer
customer
eng
eng
 Solve functional problems  Capture requirements
 Architecture  Test value / determine
whether customer will pay
 Performance
 Competitor reviews
 Which tech stack to use?
 Prioritizing roadmap
 Usability / process flows

17. Many Investors Will Tell You to Bring on
Experienced Team Early. Don’t.

18. Hire People Who Punch Above Their Weight Class
http://www.bothsidesofthetable.com/2011/03/17/whom-should-you-hire-at-a-startup-attitude-over-
aptitude/

19. Your First Sales Reps Should Be Evangelical &
Consultative (versus relationship managers)
Not
Not
http://www.bothsidesofthetable.com/2010/10/12/startup-sales-why-hiring-seasoned-reps-may-not-work/
http://www.bothsidesofthetable.com/2010/04/08/journeymen-mavericks-superstars-understanding-salespeople-at-startups/

20. Engineering needs three distinct management skills:
people, process, & technology leadership
http://www.bothsidesofthetable.com/want-to-know-difference-between-a-cto-and-a-vp-of-engineering/

21. Many Startups Have Too Many C’s. They Are Usually a
Fudge For Co-Founders to Feel Good About 1 Founder
Becoming CEO
http://www.bothsidesofthetable.com/2011/09/12/why-your-startup-doesnt-need-a-coo/
http://www.bothsidesofthetable.com/2011/09/17/further-thoughts-on-startup-operations/

22. Functional Responsibilities Help Better Divide
Work & Make People Accountable.
CEO
CEO
VP
VP VP
VP VP
VP VP
VP VP
VP VP
VP
Engineering
Engineering Product
Product Sales
Sales Marketing
Marketing Finance
Finance Biz Dev
Biz Dev
I am reluctant to see “president” or “COO”

23. A to B Round
(when you’re ready to
scale)

24. Most Founders Get Bogged Down in Minutiae. You
Can Get Huge Benefit from an Office Manager who
Doubles as an Admin
http://www.bothsidesofthetable.com/2011/10/28/the-controversial-first-role-to-hire-after-your-a-round/

25. Hire a VP of Finance – Look for Somebody Who Can
Help with Ops, Legal, HR, Office Space, etc

26. Board Construction
 Limit number of VCs on the board
 Be very careful about board observers. They are the
equivalent of board members.
 Limit management officially on the board – makes
changes over time too difficult.
 You can assign your founder seats to startup ceos if
you’re worried about control (you control seat)
 Strong industry independents on board – but make
them write small checks to be committed.
http://www.bothsidesofthetable.com/2009/10/14/when-the-board-of-a-startup-votes-theres-a-problem/
http://www.bothsidesofthetable.com/2012/08/16/rethinking-board-observers-the-role-of-the-silent-observer/
http://www.bothsidesofthetable.com/2012/08/15/should-you-really-sit-on-other-boards-when-youre-a-startup-founder/

27. </Good Luck>
Mark Suster
Startup Grind , February 2013
@msuster ; BothSidesoftheTable.com