In this chapter, I cover some other priorities that entrepreneurs will need to focus on to maximize their chances of success:
- Distributing equity is an important part of running a startup, which should be seen as an opportunity to appropriately reward and motivate teammates rather than as a zero-sum game. In the highly volatile and people-dependent world of startups, it is always better to think long-term about growing the pie and fairly compensate people rather than try to shave off a few tens of percentage points for some illusionary short-term gain.
- Political bickering such as fighting for titles early on is destructive for new ventures and should be dealt with decisively and immediately. Performance should be the only dimension on which team members are evaluated.
- Advisors can give credibility, lend domain or startup expertise, and make introductions. Therefore, building an advisory board can be a great way to jumpstart the success of the venture.
- Similarly, the Board of Directors can add a lot of value in operational and strategic matters. However, since directors have fiduciary responsibilities, which include overseeing the work of senior management, entrepreneurs need to employ a different approach. The most important thing is to find board members who are a good fit for whatever your strategic objectives are and are willing to both support and critique your plan and execution.
- Legal issues vary in importance depending on the industry - for example, in the high-tech industry patents are generally used for defensive purposes, while in pharmaceuticals they are the cornerstone of profitability. Whatever industry you are working on, it is imperative to pay attention to legal matters, because mistakes can be very costly.
- Partnerships can add tremendous value or be a major distraction. Unfortunately, the line between these two is often very thin, so it is worth being very thoughtful about the exact value-add that the partners are seeking before starting the relationship. In my experience, most early stage startups should stay clear of partnerships until they are in a strong position that they can use as leverage for negotiations.
- Finally, developing a support network is underestimated but crucial when working on something as fragile and lonely as a startup. Family, friends, and other entrepreneurs can be a great source of perspective and advice.
This chapter concludes the section on building the startup organization. Next, I focus on achieving product/market fit.
