There’s an increasingly outdated stereotype of technology companies: one geek, one suit. It’s easy to point at Apple (Jobs, Woz) or Microsoft (Gates, Allen) and make this assumption, forgetting that all those founders were pretty technical. If you have to build something first, you can’t spare a founder slot for someone who can’t get their hands messy with code and product.
It’s a heavy-handed stereotype, to be sure—when IBM colossally under-estimated Gates’ business acumen, it paved the way for Windows. But it was a model that stuck. The stereotype is grounded in fact: the skills needed to create things are often different from those needed to sell them. As those companies grew, one founder became the technologist, the other the salesperson: don’t forget that Jobs convinced Woz to work for four days straight on Breakout, then pocketed the bonus.
There are good reasons why two is the right number of founders and it makes sense for them to have complementary skills. But the suit/geek stereotype is becoming increasingly long in the tooth.
Hacker, hustler, designer
The startup dream team has changed. Dave McClure proposes a triumvarate he calls “H2D” — a hacker, hustler, and designer. This is an important shift. In the early stages of technology, the trick is to get it working properly. Those that can make hardware and software do things it’s not supposed to reap huge benefits. But today, much of the uncertainty in hardware and platforms is gone.
The starting conditions for a technology startup today are different.
- Cloud computing lets us pay as we go, lowering the up-front investment and pre-selling needed to fund the business.
- Flat, two-way communications channels such as social networks and video sites can cut marketing costs, provided the message is interesting enough.
- Developers are standing on the shoulders of giants, in the form of fourth-generation languages, third-party services, and rich frameworks that do much of the heavy lifting.
- It’s possible to test ideas with a minimum of product, using surveys and prototypes, to be sure you’re building something people want before investing significant time and money.
I saw this first-hand a few months ago. During one recent Hackathon we ran, 55 people built 18 applications in 12 hours. Several of these teams did market development, and even had time to make slide decks explaining their products. That was possible because, early on, the hackers were really systems integrators; and the hustlers were really market researchers.
The new secret weapon is design. With all the barriers to starting a company removed, if you’ve got a decent idea, then a dozen other people are already working on it (something a friend referred to as Rule 34 applied to startups.)
With all those competitors, design is the tie-breaker. Design governs how the site looks, how the app scrolls, the subject line of the e-mail, the stickers, the blog widget, the on boarding process, and every other aspect of how users interact with the organization. It’s branding, loyalty, and engagement. And the person who delivers it is a designer. Dave’s right: they’re essential.
The fourth hat
But I think we’re still missing one team member. Above all else, early-stage firms need to iterate quickly. They need to gather feedback on how their product is used, analyze it, devise experiments, and figure out what has to change. In an early-stage company, the role of analytics is to iterate to product/market fit before the money runs out. As a result, every startup needs an analyst.
There’s a horde of tools to help analyze application adoption: Geckoboard, Mixpanel, Google Analytics, Clicky, Clicktale, Kampyle, Kissmetrics, and Totango are just a few, and they’re all cheap or free for small businesses. The insights they yield, however, are invaluable.
It’s not just about iterating. It’s also about explaining well. Infographics are the new slide decks, communicating financial health, growth, and user engagement quickly enough for even the most ADD-afflicted angel investor. A good infographic is a work of art, crafted by an analyst and a designer. At Strata New York, John Rauser explained that any good data scientist must be part mathematician, part engineer, part skeptic, and part writer.
Later in the life cycle
Later, analytics is how you keep score. Early on, it’s how you figure out the rules of the game.
Even big, established companies like Zynga know the importance of analysts. The games giant can roll out new functionality to just a fraction of players, and quickly see whether it produces the change they want. If it doesn’t, they can roll back to where they were and try something else. In fact, Zynga embeds analysts in each business group precisely to ask questions about the health of its games.
I’m not saying that startups need four founders. That kind of overhead and bureaucracy would be fatal. Two is just enough to keep everyone honest and motivated while minimizing communication. But when looking at a founding team, I need to know they can wear the four hats: Hacker, Hustler, Designer, and Analyst.