I like working with small close knit teams, where each member is strong in a particular skill set. When brought together, such a team becomes a strong cohesive force. Decisions are made faster, delegating work is simpler and everyone has specific responsibilities which they cannot shy away from. When a certain team member is not performing at par with other members, it becomes clearly apparent, and brings a much greater degree of transparency to the team.

It is within these small teams that company cultures, ethics and vision is created. The original group of founders will always have a special bond with the company as compared to others who join later on. That bond should be displayed through the passion and dedication that each one of the founders brings to the business and what they do. In essence, they should become role models for all future members who join the team at a later stage.

For businesses to scale, teams have to become bigger. However, it is important that we retain the agility, flexibility and speed that we had with a smaller team. This is not so simple to acheive, however, with a strong set of values and a clear path about the company’s direction, it becomes easier than it actually appears to be. We should never really underestimate the value and strength of a strong foundational core. It is one of the things I feel a lot of start-ups lose, way too quickly, as they move up the ranks.

I had an interesting conversation today with one of the individuals I am working with on a project. It is the first time we are working together, and our team deviated from one of the set criterions on a contract. During our conversation he brought up the issue of developing trust and how it cannot be developed when line items are not adhered to. I understood where he was coming from, and given this was our first project together, it was an understandable concern. I thought about his comment, and more holistically about trust a lot more in context to start-ups after our conversation.

Trust is definitely an intangible factor, one which takes years to develop, and no time at all to destroy. It is actually a very fragile component in most relationships, and one which is,  and should be given a great deal of importance. As a start-up, your first customer is trusting you to deliver on the promise you have committed to.  I have been in this position many a time, and have admittedly failed to deliver exactly what I committed to on several occasions. Given the nature and unpredictability of start-ups I think many of the customers I have worked with have understood this, and were good enough to give me further chances to redeem myself.  Hence the above statement was an interesting observation, and goes to show that trust is not built solely on line items and contracts alone. This is a much greater intangible component, it is based on our communication, our character and overall how we conduct ourselves. If I come across someone who says one thing, communicates another and delivers something completely different, there is obviously no consistency in the story. This in turn causes a breakdown in trust.

However when there is consistency in behavior, we get a much greater feel for where the person is coming from, and where they are going. Trust has to be earned over time, it is not something that can be developed overnight. We need to work towards it on a daily basis.

I remember my first start-up with some friends in college. We had a pretty simple conversation regarding splitting equity, and reached an agreeable figure of 33.3% for each one of us. It was a simple exercise, and not much thought went into it! Later on that year, one of the partners decided to spend a lot less time on the business since it was not gathering traction at the rate he had hoped for. However, he still retained 33.3% of the business! The two remaining partners had a hard time dealing with this, coming up with various schemes to put some sort of structure in place whereby only those who contributed to clinching deals would get a share of the profit. However, it was not as simple as we thought it would be, and was the cause of many arguments, which strained our relationships outside the realm of the business. This is a mistake I made a couple of times before discovering the importance of vesting schedules, and the need to put them into place right from the word go, when incorporating your company.

A vesting schedule comes into play after the partners have agreed upon an agreeable equity split, which needs a lot more thought than a casual conversation on how much everyone thinks they should get! I have written a post on equity splits which may be of assistance to new founders. Once you have a determined equity split in place, a vesting schedule is basically the disbursement of the equity to the founders. For example lets say you have 4 partners with an equal equity share of 25% each. A vesting schedule usually sets a percentage that each partner will earn on successfully staying with the business for a set period of time. The partners may decide that they will disburse equity over the course of 3 years and each partner will get a 33.3% of their equity share at the end of every year. If a partner decides to leave at 1 year 3 months, he/she will not leave with the full 25%, rather it would be  10.4% which he/she could decide to either sell back to the partners or retain.

Each vesting schedule has a unique set of terms and conditions depending on options available to founders, if and when they would like to exit the business, or conversely add more partners etc. Following this process will save founders a lot of stress and frustration when partners decide to leave or disburse equity fairly when one founder is spending more time on the business as compared to another. It is a lot easier however, to have all of these difficult conversations before a business is even formed. However, if experience has taught me anything, it is that, these conversations actually strengthen the team, and deal with a lot of difficult questions straight off the bat rather than saving them for later, when things could potentially become more complicated.

When I graduated from college, I had a relatively easy decision regarding whether I should take up the job offers  I had, or carry on with my business. My business was up and running, and profitable, and, having experienced work in the investment banking department of a large bank, my choice was pretty much made and fairly clear without too much thought and deliberation. My family was supportive of this idea which was another key factor in making the transition a smooth one. However, maybe my case is an anomaly which most college graduates do not experience. Usually at graduation time there is no set business to do, and even if there is, it is very much in the conceptual stage and untested. There is hence much family pressure to take a job and acquire :

1. Discipline to work in a 9 – 5 job.

2. Get experience before you eventually make the transition to running your own business.

3. Bring stability to your life & pay off any debts you may have incurred at college.

All valid points, and in most cases, often the right choice for people to get a job rather than start up their own business. However, my take on the matter is that this decision is purely dependent on the characteristics and personality of the person. To argue the first point, it is all a matter of a self discipline. If you are someone with the ability to get your schedule right, and work a pre-set number of hours or more everyday, then the first point in the argument does not hold true given the crazy schedules that most graduates have in college. However, this is a quality which definitely needs to be developed.

The second point of getting experience to run your own business  is bogus in my opinion. I believe the experience someone gets running their own business is far greater than anything you learn at a desk job. You may develop some functional expertise eventually in a specific area at a job, however, that will not be enough to start your own business. This essentially limits your horizon to a specific area, and more often than not, strategies taken by larger companies are not translatable in the startup world. Lastly, when do you achieve enough experience? I know a lot of people who said they would quit their jobs after a couple of years, but that seldom happens! Once you get into the corporate routine with a stable pay check, you take on responsibilities such as mortgages, leases and eventually get married. Each one of these factors work against your ever taking the plunge into the startup world.

The last point regarding stability and getting rid of your debts has some degree of truth to it. I agree with the getting rid of debt aspect of the argument, I don’t however agree with the stability aspect as much. When you are 23 do you really need stability in your life? This is the time in your life when you can take the greatest amount of leveraged risks as you do not have major responsibilities. The stability concept is definitely appealing to parents who are able to sleep a lot easier at night knowing that their son/daughter is working at a reputable firm, which will eventually enable them to live the ideal cookie cutter life.

My thoughts in this post are definitely biased, it is true. However, they are biased towards those individuals who actually want to take risks to do something remarkable with their lives. There is a need inside of these individuals to create value and wealth themselves. Entrepreneurship is definitely not for everyone. It is a roller coaster ride which has the ability to turn your life upside down. It confuses people, specially parents and the people in your life , until you experience some degree of success in what you are doing. This is a route meant for those individuals who have the ability to risk everything they have in return for a chance to achieve greatness. If you are a recent graduate, and think that entrepreneurship may be the path for you, you need to fight for it like everything else in life. Overcoming the odds is what sets entrepreneurs apart, and the sooner you get a head-start, the better!

Is it possible to perform at your best all the time? Maybe not all of the time. However, we do have the ability to give whatever we are doing, the best we can! That is a key factor that differentiates the great from the good. Life is too short to be giving half hearted shots at whatever we want to or have to do.

Being an entrepreneur requires bringing one’s A game to the table everyday. As it is, the odds are often stacked against you and the only way you are going to beat them will be to give whatever you do, your very best. Half hearted attempts clearly display one’s disposition, and reflect directly on you and your business.

The old saying, that there is no substitute for hardwork, has a lot of truth to it. Along with working, we have to work smart as well. In my experience, the harder we work at something, the better we become at it and are able to do things in a better and more comprehensive manner. This whole post reiterates a point that we have been told repeatedly since we were kids by our parents, teachers and mentors. Yet, how many of us give whatever we do our best more often than not?