In this article we consider how the founder and team impact on success. While it could be argued that all business failures ultimately lead back to people through their actions, inactions or decisions, some failures can be directly related to people issues or the founders themselves.

The Founders Business Skills and Domain Knowledge

Business success is often dependent on the skills of the founders. The founders lack of knowledge in technical, sales & marketing or business skills often leads to problems in startups. This can be compounded where the founders lack domain knowledge or experience in the targeted market sector and where they don’t have a true understanding of their customers. In some cases technical knowledge can be critical however the lack of business, commercial or sales and marketing skills is often the bigger reason for businesses getting into trouble.

You need to become self-aware knowing where any weaknesses in your skill set could impact on the business and seek cofounders, mentors or outsourced expertise to fill the gaps. Where this is not possible allocate the time to improve your skills, creating a personal development plan and getting the appropriate training. The skills a founder needs change over time as the business scales so you will need to continually develop your skills and adapt or bring in a different type of leader more suited to scaling the business.

The Founding Team

Friction within the team or between cofounders can be a common reason for businesses to fail. There is contradictory evidence of the benefits of being a solopreneur over having co-founders, but having a cofounder that is a good fit will more often than not improve the businesses chances of success.

The optimum number of founders has been shown to be two. The skillset balance having one with business & marketing experience, with the other being technical focusing on the product. For those looking for funding, single-founder teams are less attractive to investors as they are a single point of failure.

A cofounder needs to be someone you want to spend a lot of time with and someone you trust. Cofounders should confirm their alignment on values, goals, expectations for the future, and even their different time commitments. If your cofounder is someone that you don’t know well, consider having a trial period. Getting a good personality balance is important. If one founder is headstrong have a partner that is able to provide sanity checks on each decision made.

It can be beneficial to put a cofounders agreement in place. This can cover areas such as splitting responsibilities, detailing what happens if one founder is putting more sweat equity into the business, vesting arrangements and mechanisms for decision making and feedback. Disagreements with investors can also derail a business so spend time finding investors that are a good fit.

Ability to Execute

Many entrepreneurs are very creative and come up with great ideas but lack the ability to execute. Some founders prefer the buzz of starting something new over managing or scaling a business. They can suffer from “shiny object syndrome” feeling the urge to jump at every opportunity that arises rather than seeing the current opportunity through to completion. Others are good at execution but try to take on too much wanting to do or control everything themselves, which can lead to burn out.

The ability to execute is often associated with issues of mindset or routine. Mindset is often the biggest issue, manifesting in self-doubts, fears and limiting beliefs, which can become paralysing. Seek help if mindset issues are holding you back.

Founders need to stay focused on the work that really matters. It’s easy to get overwhelmed by the details so take time away from the business to make sure that you are heading in the right direction. To stay in control you need to develop prioritised day-to-day routines to run the business, define what you need to delegate in an outsourcing plan and put a time management system in place that suits the way you work.

Motivation and Mindset

Entrepreneurs often go into business without a clear understanding of the time commitment and sacrifices that have to be made. It’s natural to be over-optimistic and when you fall behind schedule it can leave you feeling frustrated with yourself, impacting on your motivation.

Even getting to the stage of launching a business can be challenging. Many founders will have doubts around what they may have to give up in their personal lives, or if they want the hassle of having investors or employees. Perfectionism can hold you back believing that you need more market research, more knowledge or have a better business plan before you take the next step. Having an idea is one thing but many good ideas never become a business because of issues associated with self-belief and mindset.

Entrepreneurship is a lifestyle not a regular 9 to 5 job. Stress or a poor work life balance build up on your wellness over time. Consider ways to delegate, outsource, or partner. Create better systems that solve recurring problems. Look for support if you become overwhelmed. Your support network can include your family or having a mentor or coach. Failed entrepreneurs often question why they didn’t seek support earlier.

Overnight success is rare. It is common for founders to become discouraged when their business hasn’t meet their expectations. Startups take a lot of effort, if you’re not building something you have a passion for, it can be difficult to see it through. Entrepreneurs need the grit and persistence to see through these tough times.

Building the Right Team

When the time comes to scale, you need to build a diverse and balanced team with experience across the range of skill sets needed. Early-stage hires are often the most important to the success of your business. Hire a team that is aligned to your vision, that are a good fit with the culture you are trying to promote but are also able to positively challenge the direction of the business. Startup employees need to be flexible as they may have to function in multiple roles during the early phases‎. Hire slowly. Fire quickly.

Your major decision will be whether to build an in-house team to benefit from intangibles like culture and customer service or to out-source in order to keep your costs flexible as your cash-flows might not be predictable yet. If you have access to sufficient funding it might be advantageous to have a bigger in-house team, where funds are tight it would be more prudent to keep the core team small and to out-source. Over-hiring will burden your business with fixed costs that it might not be able to sustain.

Your network

Having a strong network can be critical in some businesses. Networking can land you a new investor, a great employee, a new customer, or a great mentor. Manage your network proactively and learn from other entrepreneurs who are successful.

First time entrepreneurs have higher failure rates. Founders who have previously started a business have a 20% higher chance to succeed in their next venture. This shows the importance of building a network of people or working with a coach who has already been through the learning curve.

Founders need to be self-aware, filling any gaps in your skillset. Having the right team is often the greatest determinant of success.