Seeing the unseen: the startup journey
In a recent conversation with Yaniv Vardi, the CEO of Claroty, I learned that one of the things he appreciates most about Team8 is that he can speak to us about everything to do with scaling his startup. Whether it’s tactics or strategy, he knows we’re a partner that he can talk to. In fact, he called this our “killer combination.” This got me thinking about how long and lonely the entrepreneurial journey is, and all the headline moments we see from the outside – the funding announcements, new product launches, customer wins and exits – is just the tip of the iceberg. 90% of the startup journey is hidden below the surface, similar to an iceberg.
Take the record 560 IPOs that took place on the Nasdaq alone in the first three quarters of this year, raising US$136 billion. Behind each leader ringing the stock exchange bell, is countless hours of blood, sweat and tears for them and their teams.
In addition to the unseen challenges, setbacks, sacrifices, opportunities and hard work at all stages of the startup journey, founders are increasingly forced to expand their roles and scope of responsibilities, particularly after their first institutional investment has been secured. The laser focus required to land that seed round is suddenly split. Startup leaders now need to oversee growing their company: hiring people, hardening and scaling the technology, and driving their product to market. Take something as simple as the way a founder tells their startup’s story: things that matter to investors, such as customer lifetime value, mean nothing to actual users, who care most about the value they get from using your product or service. So the founder has to shift their messaging to a different audience while maintaining strong investor relations to ensure that support will be there for follow-on funding at some point in the future.
Behind the scenes, a founder’s new operational to-do list is suddenly both long and urgent. Typically, growing the team is at the top of this list. Because despite the myth of the lone wolf entrepreneur, the growth team that an entrepreneur surrounds themselves with is key to ongoing success. Decisions around when (and who) to hire and when to partner, suddenly start taking up a lot of time and energy. In another conversation, Assaf Egozi, CEO and Founder of Noogata, recently discussed the challenges of building a team and creating a company culture during the pandemic, as well the tough inevitability of needing to fire people who simply don’t meet expectations.
Further complicating things, hiring is not always the ideal solution to acquiring the skills and expertise a growing startup needs. While each team’s requirements are unique, all new companies need to access the right mix of skills and expertise across a range of domains, including finance, legal, marketing and operations. All of which are important, but only some are core to the essence of what the company is trying to achieve. Certain roles are obviously suited to being full-time and in-house, while others make more sense to be outsourced, especially if this gives you access to a range of specialists, instead of stretching in-house generalists too thin.
The secret sauce though, is to find company-building partners that get your industry and buy into your vision, as well as being experts in what they do. The same applies to the critical expert advice needed to help founders and founding teams navigate their next stage of growth, and often the one beyond that as well. Advice from experienced partners who have lived the part of the startup iceberg that no one else sees, and have done the hard yards themselves, both strategically and operationally, bring an unfair advantage to any startup.
Growing the internal and external team is only one unseen aspect of this new split focus; founders have many other pressing priorities that demand time and energy. For a successful company, however, leaders cannot overlook the importance of having the right people on their team. Especially as it’s this team that is going to be sharing the unseen part of the startup journey with you.
Just as you can’t tell the shape or size of the entire iceberg from looking only at its tip, each individual startup journey is unique, and you can’t tell the shape of the unseen highs and lows by just looking at the marquee moments. You need to walk the road with the founders and their teams to really understand their story.