This article was originally published in Management Today
In my opinion, successful businesses are less about the idea and more about connecting the dots by building a 'dream team'. Like atoms in a fusion reactor, when you put great people in a room together, something special starts to happen. It seems as though they’ve suddenly developed superpowers – and you can almost see the brainwaves moving across the room.
The first thing is to know who you need to bring in – and that requires some research. When I came across my latest venture, online estate agency eMoov.co.uk, it had some initial traction and good growth metrics – but I knew to accelerate growth we needed to add to the team. It needed the vision, technical skills and knowhow to grow into a national brand.
Every business is essentially a collection of transactions so I find that the most effective way to diagnose pressure points is to peel each transaction back. I will ask a founder to walk me through an example transaction step-by-step and for every point in that transactional chain I’ll ask three questions: how do you do this, who does it, and what does it cost you? Once I’ve documented that, I’ll have a visual map of how the business works, and I’ll know who I need to bring in.
With eMoov a lot of the processes were offline even though it’s an online business, so I knew the technology needed to be developed. One of the other pressure points is customer acquisition, which as an online business required significant investment on the marketing and PR side.
I find that the best way to attract top talent is to start with the board. I brought in a digital property marketing expert who had been responsible for growing the Findaproperty.com and Primelocation.com brands, a top CTO from Wonga.com, and a tech entrepreneur who successfully sold his business to Groupon and now works for them. When you put these high calibre, well-known people together – who are brands in their own right – it drives up the quality of people in the rest of the company. They can use their networks to build the management ranks and the managers can construct the ranks beneath them. With its new board, eMoov is now attracting product managers from Ebay and other guys from Google, who we would never have been able to get without the board we have.
People often ask me about my approach for attracting top people. Of course, my reputation helps me approach accomplished individuals and ask them to do business with me, but it helps that most people seem to find venture capital glamorous and enticing. TV shows such as Shark Tank in the U.S. and Dragon’s Den over here have demonstrated its popularity; and you now have these crowdfunding sites which have become extremely popular with investors. Because of this rise in the popularity of venture capital, a lot of people find it alluring when I approach them – and I often find senior people in big corporations who are bored of their current role and want to get involved with an exciting new start-up.
Joining a company’s board as a non-executive director (NED), and potentially participating in an investment round, gives people the opportunity to spread their tentacles beyond their day job – and put one foot into a start-up venture that could turn into more. After all, involvement in the right start-up could create one’s nest egg, something more out-of-sight than ever with most corporate jobs.
Of course, remuneration is important, but I find it is critical to have advisors and NEDs' interests aligned with the economics of the business. The businesses I’m involved in are start-ups or new businesses, so I want to align their pay with the three T’s – team, technology, and turnover – that make a business successful and attractive to future buyers. With eMoov I tied my NEDs into the business with an equity share, offering them a wealth creation opportunity. This automatically changes the mindset of the NED – and whether they’re in the boardroom advising the founders and management team or out taking a stroll through the park at the weekend – they’re thinking like owners about what’s important to the business.
I’m also not after the traditional NEDs – a very senior individual who is getting towards the end of their career – which I think is the wrong fit for a start-up. I’m looking for superheroes; I’ve turned the NED concept on its head and I’m headhunting people at the peak of their career who have the energy and stamina to make things happen. People who we could bring into the business full-time if the opportunity arose. It also helps me to build my pipeline of people to bring into the business so I can replenish my 'dream team' and keep fresh ideas flowing in.
So – for me, building a great team is much like The Avengers film where superheroes come together to save the world. I try to get people with different talents to converge. Initially there’s a bit of friction, but when they coalesce they are invincible. Putting together people from different sectors is always a challenge and you need to make sure they have enough business chemistry to hit it off. But as a venture capitalist, I feel it’s my role to act as a curator and orchestrator to make sure the dots connect seamlessly. And when they do, it invariably draws a picture of a successful business.