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The power of the founding team
aug. 24, 2023

The power of the founding team

When envisioning a successful startup, the image of a dynamic and driven founding team often comes to mind. This group of individuals, united by a shared vision and a passion for innovation, plays a critical role in shaping the trajectory of a new venture. But what is the optimal number of founders for a startup? What are the characteristics of a good founding team? And what skills should these founders have?


This article delves into the significance of the number of founders in startups and explores both the advantages of larger teams and of smaller teams. This is summarized to describe the ideal founding team, some final important considerations about founders dynamics and complementarity are shared to add some nuance. To finish, a simple framework using skill buckets is discussed that is used by investors to determine the skills of the founding team and the first hires.


This article is co-authored by Olivia Vandesande, an advisory board member at Angelwise. With a background as a senior executive in HR and merger reorganizations, she made the decision to join Skelia, a scale-up founded by her partner. Skelia is the international leader in building cross-border IT and engineering organizations in Eastern Europe . From 2016 to 2023, she successfully led the Polish branch, overseeing Skelia’s growth to over 400 employees. Subsequently, Skelia was acquired by Nortal, and Olivia became active at Angelwise.



More founders is better

When you are contemplating launching a startup as a solo founder, consider teaming up with a select few individuals. Here is a short list of reasons why more founders could benefit the success of a startup in the early days.


  • Division of labor: larger founder teams mean specialized roles, increasing efficiency and leveraging strengths.
  • Broader network and resources: founder teams bring diverse networks, connections, and resources, benefiting the startup's growth.
  • Resilience and continuity: multiple founders ensure resilience and continuity during challenges.
  • Investor perception: investors prefer founder teams for shared commitment and a collaborative approach.
  • Complementary skills and knowledge: diverse founders enhance problem-solving and innovation skills. A range of perspectives and expertise will lead to a more adaptable startup.



Less founders is better

Having multiple founders could contribute to an increase in startup failure rate due to founder conflicts within the team. In a one-founder scenario, there is a limited number of people connections, and conflicts can arise primarily between the founder and external parties or staff. However, as the number of founders increases, the potential for conflicts grows with each additional connection. The number of personal connections increases rapidly after 4 founders with 6 personal connections between them.

This can be attributed to differences in opinions, decision-making styles, and priorities.

Yet having less founders can also be a benefit, this dynamic can be explained by the following 5 points:


  • Efficient decision-making: a small team ensures efficient decision-making with streamlined communication and quicker consensus, allowing agile responses to changes and opportunities.
  • Stronger cohesion and alignment: strong cohesion is fostered through deep understanding, shared vision, effective communication, and enhanced collaboration among team members.
  • Flexibility and agility: the flexibility and agility of a small founding team enable them to navigate challenges, make quick decisions, and implement adjustments with ease.
  • Cost-effectiveness: for early-stage startups, a small team addresses resource constraints by minimizing variable costs, making them more cost-effective.
  • Stronger personal connections: in the early stages, small founding teams build strong personal connections with stakeholders, providing personalized attention, building trust, and gaining a competitive advantage.



What is the perfect size?

The above described effects can be summarized in the graphs below. Both graphs have the number of founders on the x axes and on the y axes the chance of startup success.

These 2 graphs can be summed and normalized to have an overview of the complete effect. Note that none of these graphs are constructed using concrete datapoints, they are merely used to represent the underlying idea. 


It's important to note that the optimal size of a founder team may vary depending on the specific startup, industry and circumstances. The key is to strike a balance where the team is large enough to bring diverse perspectives and capabilities but not so large that coordination and decision-making become cumbersome. Other considerations when finding this balance:



  • The quality and nature of the relationship among founders plays a determining role in the success of a startup. Respect and unity serve as crucial catalysts for achieving positive outcomes. When founders and early hires demonstrate effective teamwork, it sets a favorable precedent, especially since they will eventually have their own teams to manage.
  • Voting rules (e.g. unanimous, simple majority, qualified majority) can play an important role in decision making between founders. The importance increases after an investment round so be sure that you have sorted this out in the beginning.



“Founders need to understand each other on a deeper level. In Dutch we say “Het schoentje mag niet wringen”, meaning that there can’t be any friction.” – Olivia



  • In the previous and following quote we want to draw your attention again to the relationship between the founders. Is everyone aligned? Some people might invest cash and others don’t. Is everyone involved for the long game?



“Around thirty-three percent of marriages end in a divorce in Belgium. 
Sixty-five percent of startups fail due to founder conflict. Choose your partner(s) wisely.” – Ruben



  • Complementarity, as already mentioned, is a key differentiator between good and amazing founding teams. Do the founders want the same things? Are their visions aligned? Are the roles and responsibilities crystal clear? But mostly do the founders have a complementary set of skills and capabilities.
  • The last points introduces the subject of the next chapter where we will do a deep dive on those capabilities and how they can be mapped.



Founders team through the eyes of investor: skill buckets


When investors assess a startup team, they often seek to understand the collective skills and expertise that the founders bring to the table. To evaluate the team efficiently, Angelwise maps these skills into three primary buckets: product, sales, and general.


The product bucket comprises individuals who are instrumental in developing and delivering the startup's product or service. This includes roles such as product managers, technology officers, developers, testers, analysts, and front-end and back-end specialists. Their skills revolve around product ideation, design, development and quality assurance. They ensure that the startup's offerings align with market needs, are technically robust, and deliver a good user experience.


The sales bucket encompasses individuals who excel in marketing, growth strategies and sales. These team members possess the ability to effectively promote the startup's offerings, acquire and retain customers and drive revenue growth. Their expertise lies in understanding market dynamics, crafting compelling value propositions, and executing successful sales and marketing campaigns.


The general bucket encompasses individuals who contribute to the overall functioning and growth of the startup. They possess skills in areas such as hiring and teambuilding, legal, finance and fundraising, and operations management. These team members are responsible for building a talented workforce, managing financial resources and optimizing operational processes to drive efficiency and scalability. They are also responsible to translate the service or product (build by the product teams) you are offering in commercial/legal agreement (sold by the sales teams), this is generally one of the first skills where startups need external experts for help.


By categorizing the skills of the founding team into these three buckets, we can gain a quick overview of the team's capabilities and how well-rounded it is. A balanced team with complementary skills across sales, product and general areas is often seen as favorable. Such a team demonstrates the ability to develop innovative products, effectively bring them to market, and efficiently manage the startup's operations and resources.


We recognize that a startup's success hinges not only on a compelling idea but also on the team's ability to execute and navigate the challenges of building a business. Therefore, a thorough evaluation of the founding team's skills (and first crucial hires) in sales, product, and general areas provides valuable insights into the team's potential to drive growth, adapt to market dynamics, and ultimately deliver returns on investment.


 “From my perspective, a CEO must possess the ability to drive sales since it forms the lifeblood of all commercial enterprises and remains the topmost priority. The team should complement each other, while also understanding each other's roles crucial for guiding the company towards success. Let me add, as a final remark, that at least one founder, and preferably the CEO, should have also a broader knowledge and understanding of each of the skill domains of the other departments” – Olivia




 “Understanding the skills and qualities of the founding team is absolutely crucial. Anticipating strong sales performance every quarter from someone

who doesn't excel at sales could have devastating consequences.

The same applies to the product team; it's unwise to expect 
a blacksmith to build an electric car.” – Ruben



Below is an overview of the three buckets (product, sales, and general), the corresponding skills, and the connected C-level roles. It can be a good exercise for the founders & startup employees to map their skills on the genius zone framework introduced in our article “The entrepreneurial journey towards growth”. (link)






Reflection: What does this mean for you?

Be aware that every situation is different, you are the judge on how this applies to you and your startup. Are you aware of your skills and the related bucket? Do you use such a framework in your daily operations, e.g. to consider the profiles of new hires?

Share your ideas and viewpoints with us, and we might take them up in another newsletter or blogpost.

Contact us at mail@angelwise.be


 

Sources:

Azumuta on the cover of Trends Magazine

17 jan., 2024
The Ghent-based scale-up streamlines work instructions, training, and quality controls. Written by Joris Hendircks Brussels, Dec. 14 – Recently Batist Leman, CEO Azumuta, had an interview with the Trends Business Magazine. There, Batist shared his views on the most significant challenges to our modern-day manufacturing scene, such as the skills gap issue, increasingly tight regulations, and unchecked international competition. To address these challenges, Batist conveyed his “disruptive innovation” solutions and how using Azumuta’s one-stop manufacturing software will alleviate even the most complex challenges. The original article was written in Dutch, translated below: Azumuta has developed an integrated platform that helps the manufacturing sector to streamline work instructions , training, and quality controls – with better employee versatility and productivity as the main impact. This is something that the manufacturing sector urgently needs: the Ghent-based scale-up, with clients such as Atlas Copco, Novy, and Nitto, has recently raised EUR 2,8 million to speed up its international growth – as explained by the CEO Batist Leman “Any production process is becoming more complex due to the increasing quality requirements and regulations. This, combined with a tight labor market, a lower-qualified workforce, and rising competition from abroad, makes digitalizing the production processes a must for any manufacturer who wishes to survive.” “The increasing complexity makes it challenging for shop floor operators to know precisely what they’re supposed to do. As a result, quality issues will emerge, and operators will take a long time to be properly trained. Therefore, our system offers a digital assistant for shopfloor operators, something that’s often overlooked even today.” Disruptive innovation “In the era of digital transformation and industry 4.0, where technological advancements bring ground-breaking changes for manufacturers, a critical element is often neglected: the role of operators. This is where Azumuta steps in.” “Our software knows well the unique potentials of all operators and fully integrates them into the digitalization process. While many companies focus on large-scale technological upgrades, Azumuta offers a new approach by emphasizing the crucial human element. Such software is more relevant than ever, as proven by the strong demands from domestic and international clients, ranging from small & medium-sized enterprises to multinationals. These companies, spread across vario us industries and regions, fully understood the values of our approach to this disruptive innovation.” “Azumuta was designed to streamline work, improve communications, and support efficient decision-making processes on the shop floor. With contextual information, built-in error detection systems, and user-friendly & intelligent interfaces, operators will know precisely what they must do while the management obtains real-time information from these data. By integrating it into the existing production systems, you can immediately achieve sustainable efficiency improvements.” Operational excellence “Often, quality controls are done at the end of the production process, which means defects are only detected late. Therefore, our system uses inline quality control. In combination with digital work instructions, all parameters are continuously captured, such as ticking off completed tasks, measuring weights and accepted deviation tolerance, etc. If there are deviations or errors, you can intervene earlier, where the products’ quality is significantly improved, and they don’t have to be disposed of due to defects. That’s an essential component in the ESG strategy.” Agile workforce “Companies often have little knowledge of their workers’ complete skillset. Moreover, workers can always leave or retire. This means that some specific shop floor know-how can be lost. Our system lets users know which employee has which expertise, in which skill set workers should be further trained, and which skills haven’t been fully mastered yet in a team. Furthermore, it’s not easy to find new workers at the moment.” “Often, companies have to hire workers with a training and education background that is lower or doesn’t fully match what is expected. They might not understand the production process, making on-the-job training more important than ever. Digital work instructions and inline quality control offer top-notch support to deliver high-quality work. This module also allows you to comply with the legal requirement to show the number of training hours that your workers have undergone. All of this is fully automated, removing a significant administrative burden.” “Previously, decisions were taken top-down, and workers on the shop floor were supposed to simply implement these decisions. However, we believe that shop floor workers possess significant know-how on how things can be done more efficiently. To engage them, we have added a communication module where they can swiftly indicate problems and share their ideas. They can also get feedback in the same way.” Strong growth “In conclusion, we can say that our platform enables manufacturing companies to improve their operational efficiency and time-to-market rate. Our unique focus on operators allows our clients to organize their workforce in an agile manner. This makes our platform a perfect addition to the existing MES and ERP systems. The quick and profitable growth of Azumuta, the success of our clients, and increasing demands from abroad mean that analysts and investors recognize the importance of this market. Recently, we have raised EUR 2.8 million to support our effort to fulfill increasing international demands.“ Contact contact@azumuta.com https://www.azumuta.com/company/contact/

Newsletter 5

16 nov., 2023

Dscribe data enters partnership with TriFinance

26 okt., 2023
Data catalog as a centralized and searchable repository for an organization's data assets. [Ghent, 12.10.2023] TriFinance has recently entered into a partnership with dScribe, an innovative data catalog solution provider headquartered in Ghent. A data catalog, in essence, serves as a centralized and searchable repository for an organization's data assets. "During analytics projects," Maarten Lauwaert , Expert Practice Leader at TriFinance says, "we often witness discussions on the definition and management of KPIs. At the start of a project, people create Excel files containing KPI definitions, but forget to update them after the go-live. dScribe helps business users to locate the right data and reports, and manage KPI definitions.” For TriFinance , implementing dScribe at clients is a way to strengthen their position as a business partner, enhancing their business acumen and analytics expertise. One Stop Data Shop dScribe is a one-stop-shop to catalog , document and discover anything data-related. The solution is cloud-based, integrates with different reporting solutions (including Power BI and Azure Analytics) and gives the users a single entry point to find, understand and access all reports & data, no matter where they are stored. Moreover, KPIs and business knowledge can be defined in dScribe and are linked to the reports where they are available. Business users will always have insight in the correct KPI definitions , and in the parts of the reporting environment where these KPIs are being used. “For our customers, dScribe is a big first step in better governing their reporting environment,” Maarten Lauwaert says. dScribe: a Collaborative Data Compass Pieter Delaere, CEO at dScribe: “Employees who have access to meaningful data are best equipped to drive their organizations forward. Despite substantial investments in data and analytics, many organizations still grapple with the transition to widespread data-driven decision-making and innovation. Often, the root of this challenge is a lack of accessibility and comprehension of the available data and reports. We're on a mission to bring data front and center for every curious mind eager to drive their organization forward. For that reason, we call our solution a ‘Collaborative Data Compass’." "Business users often struggle to locate the right reports and KPIs," says Maarten Lauwaert. "Their understanding of the full analytics solution is not always clear. Checking a report without knowing the exact definitions of the KPIs slows down the adoption of the analytics solution. That's why our partnership with dScribe, offering a business-oriented and affordable data catalog solution that integrates well with Microsoft Analytics, excites us. We believe that this solution will help our customers to accelerate the adoption , usage and governance of their analytics solution." Maarten Lauwaert, Expert Practice Leader Data & Analytics, TriFinance About TriFinance and dScribe About dScribe Founded in Belgium in 2021, dScribe is dedicated to guiding organizations toward data-driven brilliance. The team is passionate about empowering employees with more streamlined access to meaningful reports and data. They believe their customers deserve an elegantly designed, user-focused data knowledge solution. Leveraging a proven and continuously refined metadata management framework, along with out-of-the-box integrations, dScribe promises increased data clarity and adoption from day one. About TriFinance TriFinance is an innovative service provider with a focus on Finance & Advisory in the Netherlands, Belgium, Germany and Luxembourg. Combining transition and support, pragmatic advisory and implementation, people solutions, and training, the company offers a new combination of services, backed by a permanent pool of highly specialized and flexibly deployable project consultants. Headquartered in Amsterdam, TriFinance has branches in Rotterdam, Antwerp, Ghent, Brussels, Hasselt, Louvain-la-Neuve, Roeselare, Hamburg, Munich, Düsseldorf, Frankfurt, and Luxembourg. As a network organization with a strong focus on human development, knowledge sharing, innovation, and organizational development, it belongs to Parklane Insight, a European growth company with 800+ MeIncers. Its mission is "Furthering People for Better Performance in Do-How.” Contact Maarten Lauwaert, Expert Practice Leader Data & Analytics, TriFinance: maarten.lauwaert@trifinance.be Pieter Delaere, Co-founder & CEO dScribe: pieter.delaere@dscribedata.com
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