Depending on which expert you consult, 60-65% of new ventures fail due to problems with their start-up team.[1],[2] Resources are often in short supply or uncertain when you have an innovation business. And with unemployment in Australia currently at a record low, the war for talent is playing out across every industry sector and job discipline. So we’re looking at the best ways to build your innovation team from the early start-up days through to the scale-up phase. And which must-have roles and employee attributes you’ll need to help your innovation succeed.
Put team fit first
When you’re choosing your team, it’s worth remembering the adage: a leopard never changes its spots. While you can train individuals to acquire new skills, you can’t train them into having certain personal attributes, ethics or a particular mindset. For that reason, team fit should be the top priority for founders looking to add to their start-up team. It’s arguably more important than the particular roles and job titles your venture has. Indeed, the employees who comprise your team will shape your company’s culture and have a lasting impact on your start-up’s performance. So, in addition to having excellent credentials, qualifications and a proven track record in their respective fields of expertise, which attributes should you look for in your start-up team?
-
Shared values and vision
As a founder, make sure you have a crystal-clear understanding of what your start-up’s strategic vision is, and the values you will follow to deliver on your company’s goals. A 2019 study of 95 new start-ups in the Netherlands found that team experience only translates into better performance if team members can see the big picture and share the company’s strategic vision.[3]
-
Trust, respect and communication
Trust, respect and communication are the three cornerstones of all successful relationships, including those within your start-up team. Do your due diligence and make sure you hire people you can trust and communicate with, and who will treat you, your team, your stakeholders and your clients with respect.
-
Flexibility
All start-ups need employees that are flexible and have the capacity and capability to take on different roles and duties at short notice. Innovation and the start-up journey can be unpredictable. You need team members who are versatile and can pivot, transferring their skills and experiences into new situations and responding quickly and effectively to change.
-
A love of learning
It goes without saying that your ideal start-up team member will be on the ball and possess an insatiable thirst to acquire new skills, experiences and knowledge.
-
Grit
In addition to a passion for acquiring new knowledge and skills, make a beeline for prospective team members who can demonstrate the drive and determination to succeed. These are the people best suited to the cut and thrust of start-up life and the entrepreneurial spirit that comes with it. When going gets tough, you want the tough to get going and be on your team. That way you can stay one step ahead of your rivals.
-
Diversity
Your start-up team will need diversity to drive creativity and high performance in your innovation. While you want and need team members with different skills, talents and personality traits, you need to balance this with ensuring you can trust them, and that they share your company values and vision. Otherwise your start-up could struggle to make headway due to team discord.
Key positions for key players
The type of start-up you have will determine the actual job titles of the team you need to hire. But whether you’ve set up a software business or a MedTech, there are some key functions you’ll need team members to fulfil in order to increase your venture’s chances of success.
Start-ups
When your business is in its start-up phase, there are four roles innovation experts agree on as essential for success. It’s worth remembering that in many successful start-ups these key roles are shared or blended, with individual team members holding more than one position simultaneously. For example, a founder with a technical skill set may be the start-up’s Chief Executive Officer (CEO) and its Chief Technical Officer (CTO). While a founder with a business background may take on the roles of CEO and Sales & Marketing Director. That’s why having team members or co-founders capable of, and comfortable with wearing multiple hats is so important.[4] It also has the added benefits of keeping costs down and decision-making prompt.
1. The Visionary
The Visionary is a big-picture thinker who controls the company’s direction, vision and culture. This role is often, but not always, held by the start-up’s CEO, founder or in some cases a Managing Director. What’s important is that your start-up has someone at the helm looking after the company’s strategic issues.
2. The Engineer
The Engineer is a critical role and is the person who looks after the technology/innovation your start-up is developing, whether that’s software, a mechanical device or even a medical treatment or application. This position can be held by the start-up’s CTO, Chief Medical Officer or Product Officer.
3. The Rainmaker
The Rainmaker is a sales guru and is the person who brings in revenue and makes sure sales targets are met. Essential if your start-up is to grow, this role is often filled by the Chief Sales Officer or a Commercial Director.
4. The Growth Hacker
The Growth Hacker is focused on your clients, and how they view your product or service. It covers all aspects of a company’s brand, marketing and communications. Often held by a start-up’s Chief Marketing Officer, this role drives growth and works closely with the Rainmaker.
The jury would appear to be out on whether innovation businesses in the start-up phase need a Chief Financial Officer (CFO) or whether outsourcing this function is sufficient. Outsourcing as much as you can during the early stages of your company’s growth journey is a good idea. However, having a dedicated CFO can be extremely beneficial to a start-up especially if your innovation is particularly capital intensive.
Scale-ups
Bringing the CFO function in-house is definitely recommended once you begin to scale-up, as is adding a Chief Operating Officer, Business Development Manager and Customer Service Representative to your team. Ultimately as you continue to scale, depending on your area of innovation, you will need to build out teams for entire functions, such as production, design and engineering.[5]
Talent scouting
Money is always tight, whether you have a start-up or a scale-up, which makes recruitment a high-stakes activity. So how do start-up founders lower the risks and avoid making a bad hire? Take your time and don’t skip on due diligence. Keep your hiring focus on team fit and personal attributes rather than seeking out a specific skill set or qualification. Doing so will up your chances of hiring the versatile, inquisitive team member you need to drive your innovation business forward.
Ensuring you include behavioural questions as part of the interview process is a must. Use your network to find potential candidates, and don’t be shy about sounding out their credentials and track record with your shared connections. Right now, across every capital city and every industry sector and discipline in Australia, finding staff is challenging. New recruits who accept positions are often jumping ship to a new employer before their first day or during their probationary period. That’s why it makes sense to consider using a professional recruitment agency to help find the team members your business needs. Although the fees may seem expensive, in return you get to tap into the recruiter’s pool of candidates, receive advice on roles you need to fill, and if your preferred candidate leaves within three months of joining your business, most recruiters will find a replacement for no extra fee.
Funding to grow
Staff costs are often the largest expense for any organisation. And not having enough capital to expand your team can be a roadblock to progressing your innovation and growing your business. Did you know you can access the R&D Tax Incentive early with a Radium Advance, and choose how you use it?
It’s your money (your tax refund) that you receive early. So if you need your Radium Advance to cover employee expenses, you can use it for that purpose. And remember, some employee wages and costs are counted as eligible R&D expenditure so using your Radium Advances for payroll could count as reinvesting into R&D and trigger additional refunds.* Our financing is non-dilutionary and is offered at an affordable fixed interest rate. It’s usually secured against your expected R&D tax refund and there’s nothing to pay until your tax refund arrives, which means it’s cash-flow friendly too.
So why not contact our expert R&D financing team today and get the affordable capital you need to build your team?
*Radium Capital is a specialist R&D financier. The information in this article is general and is for information purposes only. It does not amount to advice. Radium Capital recommends that businesses should seek the advice of an R&D Tax Consultant when assessing and preparing their R&DTI claim.
[1] Harvard Business Review. 2019. What Makes a Successful Startup Team. [ONLINE] Available at: https://hbr.org/2019/03/what-makes-a-successful-startup-team
[2] Foundr. 2022. The Ultimate Guide To Creating The Perfect Founding Team ONLINE] Available at: https://foundr.com/articles/leadership/founding-team
[3] Harvard Business Review. 2019. What Makes a Successful Startup Team. [ONLINE] Available at: https://hbr.org/2019/03/what-makes-a-successful-startup-team
[4] Foundr. 2022. The Ultimate Guide To Creating The Perfect Founding Team ONLINE] Available at: https://foundr.com/articles/leadership/founding-team
[5] Soft Kraft. 2022. What is The Ideal Tech Startup Team Structure. [ONLINE] Available at: https://www.softkraft.co/what-is-the-ideal-tech-startup-team-structure