If you asking this question, my answer is another question… Why not? Why cannot we build world class companies out of Iceland? There are examples like Ossur, CCP Games. The cynic always says we need more examples and more track record, Iceland is small, we don’t know how etc etc I don’t agree! and I don’t agree that it should take 18 years or 20 years to build world class companies. The reason we have not seen more world class companies come out Iceland is because no-one is asking, investing and mentoring companies to be world class players. When I speak to people who are investing in compnaies they always say it takes a long time and it takes a lot of money, those may be true but it would be even more true and will not happen if we are not aligning the ecosystem to build these kinds of companies. The Ecosystem needs a few ingredients, I have written about it before. While we are building the Ecosystem for Entrepreneurs and Startups in Iceland it is also importan to understand the transition an Idea goes through before it is made into a company. There is no short cut to this process, understanding the process helps you accelerate it when you see the right indicators. Here is a video of Steve explaining Passion and Purpose and Teams.
There are specific stages in the development of a company. Steve Blank has a fantastic post explaining the transition from an Idea to a Startup to a Company. I have written a lot about the inflection point we are in, basically in terms of technology being the great enabler for Entrepreneurs. I think the biggest challenges many of the stakeholders face while looking at startups or ideas is that they evaluate the team as though it is a smaller version of a big company which is very far from the truth. Startups are NOT smaller versions of Big Companies. They need to be organized differently, their focus is different and their metrics are different. I don’t understand how one can be an investor in Startups and not know this difference. Startups are searching for a repeatable business model, they may change it many times along the way, more popularly called a pivot.
The team that can do this cannot be from a traditional organization because team members who are from traditional organizations are measured on efficiency of execution not on efficiency of search. Steve’s article very clearly lays this out Search vs Execution. Obviously, startups need to execute but on totally different goals and milestones than if they have found the repeatable business model. The biggest risk startups have is in finding the Product to Market fit or Repeatable Business Model, call it what you may. The method that is employed to address this risk comes in different flavors The Lean Startup is the new fashion, Steve created the Customer Development Methodology. All fancy words to basically define something very simple, are you creating something of value and is there someone who has a need to use that value and is willing to pay you for it. If you are able to answer that question then you have the first part of the question answered now how can you make this transaction repeatable? once you have answered that question then you move on to the next thing how efficiently can we execute that. The team that does the last task is what we all know from traditional businesses, the skillset, the mindset, training and development, team dynamics everything has to be different. Fred Wilson has written a lot about the Management teams in his MBA Mondays Section, look at Table of Contents links
- Scaling The Management Team
- The Management Team – While Building Product
- The Management Team – While Building Usage
- The Management Team – While Building The Business
- The Management Team – Guest Post From Matt Blumberg
- The Management Team – Guest Post From JLM
The above resources are valuable in building your team dynamics. I keep emphasizing the team because I fundamentally believe we invest in People, it is not the Idea, it is not the economy, it is not the currency that drives progress, people do. So why are we not spending more time developing the team?