Sometimes, a successful business can be launched out of a bedroom by just one person, but this is rare.

Even if this succeeds, sooner or later you will need to scale, and to do this you need a team and assets. Its a good idea to identify early on what kind of resources your company will need.

TEAM

You need to have people with the appropriate skills either as part of your management team or at senior level. The following three roles are critical to the success of any company and should be hired as soon as feasible:

1. The Innovator: This is the person responsible with coming up with the ideas for new product and developing them to the proof of concept stage. In the case of a technical company, it will be the CTO. In the case of a non-technical company, the skills required will depend on the technology or competency required. This role–as with all others–is also a question of temperament and attitude. Innovators will be curious, inventive, resourceful. They will tend to see the big picture. As with all roles, they will also have blind spots such as a short attention span. They will want to go on to the next new project, and will show impatience with the boring details of implementing their idea beyond the proof of concept stage.

2. The Operator: It’s not enough to have a great idea or a vision. Some one needs to translate that vision into reality and deliver it reliably on time and on budget. As outlined above, the Innovator usually lacks the necessary skills and temperament. You need someone in your business that can build a good operations infrastructure. This will include building the product, as well as making sure that it is delivered to the customer. The Operator needs to be someone who likes details, systems, and is rigorous about quality control.

3. The Seller: This role does not require explanation, but it is critical to the success of the company. In the case of B-to-B companies, it should be someone with experience and contacts in the customers’ industry. In the case of consumer goods, it should be someone with branding experience and/or experience with similar type of products.

Some would argue that you need a CEO to integrate these functions. That is certainly preferable if funding allows, but if it doesn’t any of the three key members above can fulfil that function as well.

Some would argue that you also need a Financial Director. You certainly need access to someone with financial skills, but it may be more cost efficient to hire someone on a part-time or freelance basis initially.

The other key consideration in hiring is that you should not concentrate exclusively on skills. Temperament and attitude are as important as skills and experience. Startups are difficult and every member of the team needs to be able to contribute to the inevitable debates. This requires the ability to constructively confront others as well as being open to feedback without becoming defensive. It also requires the ability to become literate in other functional areas.

ASSETS

Besides a team, you will also need assets. As with other resources, identify which ones will give you an “unfair advantage” vs. your competition. Besides people and money, the other ones to consider are:

Intellectual Property: Pursing intellectual property, such as patents, can be a trap. Applying for and maintaining patents can be expensive, and is one of the principal reasons technology startups run out of money. The competitive advantages of patents are often overestimated. It is extremely difficult to patent a whole product. Most patents are awarded for a specific technology within a product. It is therefore easy for competitors to go around these. Even if a competitor violates your intellectual property right, it will take a significant amount of funds you may not have to defend your rights.
Trademarks and copyright are also useful, but they do not guarantee success in the market place. However, if you are seeking funding, investors do prefer to see companies with patents as it makes it easier to convince acquirers that there is something tangible to buy.

Physical Assets: Consider what equipment and property you need. In the case of the latter, consider location as a competitive advantage. Whenever possible in the early stages, focus on gaining access to assets as opposed to buying them. There is a growing industry of co-working spaces, and these can be great for providing infrastructure and support that might otherwise be too expensive for an early stage startup to afford.

PARTNERSHIPS

You can’t do everything yourself. You will need to enter into partnership with other organisations, either for marketing purposes or to gain access to expertise and resources you do not have in-house. Do not confuse partners with suppliers. Suppliers provide products and services in exchange for payment. Partners share risks and rewards. You should consider entering into partnership for one of the following three reasons:

1. Expertise and Networks: In the case of marketing partners, you should look for partners who can provide you with knowledge of your markets and networks of contacts you do not have. You should also consider partnerships with people or companies that have technical or supply chain knowledge which is complementary to your own and would make a significant contribution to your value proposition.

2. Scale: The most typical example is someone with a large network of retail outlets. But this might also apply to someone who can source key supply resources and get better prices due to volume.

3. Risk: All partnerships share risk. But if a project requires far more funding than you can afford to risk, it may make sense to join forces tin another partner.

When structuring or negotiating a partnership, it is usually best to come to an informal understanding before involving lawyers. However, any substantial agreement should be documented after a review by lawyers. During the negotiation process, make sure to consider the following key points:

1. Objectives: What are you trying to accomplish? How will you measure success?
2. Agendas: What is the motivation for each partner? Transparency is essential.
3. Contribution: What is each partner’s expected contribution?
4. Risk Sharing: How will costs and obligations be shared if things go wrong?
5. Decision Making: How will decisions be made–especially if you disagree.
6. Termination: Always include a time limit for any partnership, outlining how it will be renewed. Agree how the partnership is terminated, if either partner wants to end it and/or if there is a failure of performance by either party.

Thats all for now - more to come soon!

---

Check out previous parts:

Part 1 - Intro

Part 2 - Minimum Viable Segment

Part 3 - Job Story

Part 4 - Market Size

Part 5 - Value Proposition

Part 6 - MVP

Part 7 - Customer Adoption Journey

Part 8 - Marketing Tools

Part 9 - Differentiation