Earlier this year, a study of United States Census, Business Dynamic Statistics, by Ecliptic Capital’s Christy Cardenas, revealed that new businesses account for almost all [net] new job creation, and 20% of gross job creation. In a world in which 90% of startups fail and 54% of new businesses end within the first few years, a known challenge for entrepreneurs should be top of mind. It all comes down to people.
The Right Team
A diverse team with different skill sets is often cited as being critical to the success of a company and failed startup post-mortems almost always reveal the same reactions, that a founder wished they had that technical co-founder from the start, or that they’d had a partner who loved the business aspect of things just as much or more.
Ben Yoskovitz, founder of Standout Jobs, wrote a decade ago of his experience which should ring just as true today as then…
“…The founding team couldn’t build an MVP on its own. That was a mistake. If the founding team can’t put out a product on its own (or with a small amount of external help from freelancers) they shouldn’t be founding a startup. We could have brought on additional co-founders, who would have been compensated primarily with equity versus cash, but we didn’t.”
Founding a venture is seemingly impossible but frankly, it’s done much more frequently and with more support than developing an early team that fosters a successful company.
CB Insights cited in November that the #3 reasons startups fail is that they lack the right team.
It starts with “founders” as in co-founders. Startup Genome Project found that a balanced team featuring both marketing and technology sees 2.9X more growth than a tech or business heavy team or solo founder. One person can expect to work harder and fight through adversity on their own.
When the odds and facts are so stacked against you, it should be clear that managing people is an obligation, a responsibility to yourself, for your business.