Startup Guide To Building A Great Team

Founder & Project Manager
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In a recent study, researchers parsed through essays from over a hundred startup founders to understand the reasons they believed their company failed. Not surprisingly, the two most common reasons were the lack of a need for their product in the market and the team running out of cash. What’s interesting however is that nearly a quarter of these founders believed that they failed because they did not build the right team. At 23 percent, this was the third most popular reason founders believed their company failed.

The direct correlation between building a great team and the success of a business cannot be over-emphasized. Yet, this is easier said than done. There are various reasons why great workers may not want to work for your bootstrapped startup company. Firstly, such startups are seldom in a position to match the pay and perks that employees are offered at large corporations. Secondly, there is a greater risk of getting laid off at startups. Finally, working at startup businesses often involve long hours that can mess up an employee’s work-life balance.

While startups may not be able to lure talent through pay alone, they may make up for it through other incentives. Finding the right kind of incentives for your workers is a challenge in itself and should depend on the kind of employees you are looking for.


When a bunch of cofounders come together to launch a startup, they divide the ownership of the company among themselves. It is also customary to reserve a chunk of this ownership into what is called the ‘Options Pool’. An options pool is ownership that is meant to be given away to early employees and is a way to attract and retain workers in the company.

Typically, employees are provided stocks in the range of 0.1% to 0.5% which are vested (that is, employees only truly earn them after they have spent significant number of time at the company). Equity can be highly lucrative and if your startup grows to be as big as Google someday, it can turn even employees with very small ownership into millionaires.

Offering equity to compensate for lower pay is not a panacea for the recruitment woes of all kinds of startups. For the equity model to truly work, your company should be building something that your employees believe can truly grow into a billion dollar business. If you are running a lifestyle business which you don’t intend to IPO someday, then equity may not be the right tool to attract your workers.


Unlike a corporate setup, startups are chaotic by nature and employees have responsibilities that are often undefined. Potential employees to startup companies view this either as a boon or a bane.

Some workers, regardless of how good they are, blossom in defined work structures and cannot operate under chaos. They do not make for good startup employees. On the other hand, there are other workers, who may or may not be as talented, but relish working in chaotic work environments with little direction. These are the ideal workers for a bootstrapped company that is just starting out.

The recruitment strategy for a startup must be on attracting employees who relish under chaos. This is significant because a startup business may undergo a number of pivots and recruiting an employee who may not be able to be able to adapt to these changing circumstances is often not a great fit for the long-term. Set expectations right when you are hiring so that new employees understand the work environment and are not in for a surprise after they join.

Comfort and perks at workplace

Startup culture demands long hours of work and this can mess up your employees’ work-life balance quite significantly. This is in stark contrast to what these employees can experience at corporate work places that run on a 9 to 5 schedule. What drives an employee from moving away from a 9-to-5 schedule to a startup?

The answer to this lies in the demerits that are traditionally associated with corporate life like office politics, cut-throat competition and the unreasonably high targets. Studies performed by organizational psychologists have shown that employees thrive better in positive workplaces that nurture feel-good environments. This is an environment that a startup business with fewer stakeholders can provide to its employees.

In addition to this, other perks like allowing pets at your workplace, creche for your employees’ kids and free access to the cafeteria and gym provide your employees with sufficient amenities to maintain a work-life balance despite working long and stressful hours.

Freedom to pursue their dreams

Early employees to a startup grow with their organization. People who join the company as developers or designers often grow up the ranks to become Vice Presidents and Directors of various divisions within the company. Your recruitment strategy should hence not only focus on what skills the employee brings to the company at that stage in their career, but should also be based on whether they have it in them to head their respective divisions some day in future.

A good way to gauge this metric is by identifying applicants who are entrepreneurial in nature. These employees thrive on leadership roles and are hence great assets to the company in the long term. One way to attract such employees is by providing them with the freedom to pursue their dreams within and outside the company. For a long time, Google had a “20 percent” time rule that allowed its employees to spend 20% of their time on personal projects that could benefit the company. That rule has helped Google launch several key products like Gmail, Adsense and Google Maps.

By letting employees pursue their dream projects, your startup too can benefit from their pursuits. Not only that, by providing the freedom to pursue their own dreams, you build a culture that attracts people with entrepreneurial attributes who shall be a great fit to your own startup needs.

About chrislow

Christopher Low, MyTeamPlan

Christopher Low is a project manager and lead developer with Sherlock Software. He is also the founder and owner of MyTeamPlan, a desktop-based project management software tool that is targeted at small and medium businesses.


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