E145 Fall 2007
Session 10
ABCs of Venture Teams
+
Lessons from the Movies
+
Team Dynamics Exercise
Tom Kosnik, Alex Gould, Chi-Hua Chien, and Tom Byers
Stanford University
Copyright © 2007 by the Board of Trustees of the Leland Stanford Junior University
and Stanford Technology Ventures Program (STVP). This document may be
reproduced for educational purposes only.
Page 1
Last Month:
Idea Versus
Opportunity
This Month:
Realities of
Business
Operations
© 2003 Mark P. Rice, Babson
Page 2
Our Agenda
•
Part I: ABCs of Venture Teams
•
Part II: Lessons from the Movies
•
Part III: Team Dynamics Exercise
Page 3
Finding the right team mates can be difficult…
Page 4
Part I: ABCs of Venture Teams
A. Team … Recruiting
B. Compensation
… Rewards
C. Culture
… Norms
Page 5
A. Recruiting Key Contributors
Internal
External
Key issues:
When to hire? Experience
versus passion and energy?
Qualifications versus
motivation and character?
When to use outsourcing?
Key issues:
How to select?
How to manage?
 Founders or Initial Partners
 CEO and VPs
 Designers, Developers,
“Architects” and Managers of
Products & Services
 Sales and Marketing
 Operations and Administration
 Others?





Board Of Directors
Investors
Advisory Boards
Professional Services and Suppliers
Others?
Page 6
How should you pick your team mates
for an entrepreneurial venture?
Do I trust them?
YES!
Devils’
Advocates
Soul mates
Dream team mates
Team mates
Class mates
NO!
Bozos
YES!
Do I enjoy
them?
Play mates
NO!
Page 7
Q&A with VC John Doerr of KPCB
Q. What is the most important
part of any business plan?
A. “I always turn to the bios of
the team first. For me, it’s
team, team, team. Others
might say, people, people,
people -- but I’m interested in
the team as a whole.”
Page 8
B. Compensation and Rewards
Masayoshi Son
CEO of
SOFTBANK
CORP. (Japan)
“The way I attract these people to SOFTBANK is
to explain what my dream is. It is not money
because they actually come to work and we
never talk about payment. They come to work,
then a week passes, or longer, then we finally
get around to talking about money. I’ll ask
them, by the way, how much do you want?
And they say, whatever you want to give me.
Then I ask them, how much were you making
last year? Then I give them the same amount.
So they don’t come to SOFTBANK for the money.
It’s for the dream that everyone has together.
The dream of making the company successful.”
Page 9
Understanding Rewards
In High-Potential Ventures
•
Status Determined by Contributions to Improving Culture and
Increasing the Value of the Company
•
Hence, Rewards Tend to Be Value-Enhancing such as Stock Options
(Equity Ownership)
Page 10
Compensation in Start-Ups
• Cash
 Salary and Bonus
 Benefits
• Equity
 Common Stock Plans
(Incentive Stock Options Have
Favorable Tax Rates)
 Vesting Schedule and Stock
Budget
 Tax Implications (IRS in USA)
and Security Laws (SEC in
USA)
Page 11
C: Culture …
The Secret to Long-Term Success?
Definition
“A strong system of informal rules that spells out
how people are to behave most of the time”
Two Great Quotes
“The most durable asset of a venture is its culture” (Cook)
“First four letters of culture spell c-u-l-t” (Collins)
Page 12
A Winning Culture Can Stimulate
Innovation = f(creativity, teamwork)
•
Develop Sense of Teamwork
•
Include Creative and Unusual People
•
Understand Personalities of Key People
•
Develop Open Internal Communication
•
Remain Open to Ideas/Suggestions from Anywhere
•
Be the Customer
•
Be Willing to Experiment
•
Address the Issue of Autonomy
Reference: Collins & Lazier, Chatman
Page 13
Even E145 Has A Culture …
Recall The “Success Formula”

Show up on time (with cell phones and other
stuff turned off loud please).

Be nice to people (e.g., constructive comments
only, listen carefully, and only one speaker at a
time please).

Do what you say you will do and deliver more
than you promise (both in class and out).

Do it with energy and passion.
Reference: JM Perry
Page 14
Part II: Lessons from the Movies
Chariots of Fire
Startup.com
Page 15
Chariots of Fire: What worked?
•
The Context:
• Movie released in 1982
• Based on real team: England’s Olympic Track Team
• http://www.youtube.com/watch?v=TYJzcUvS_NU
•
Key questions:
• What motivated the runners?
• What would motivate you as an Olympic runner?
• Who would you trust to lead you?
• Why or why not?
Page 16
The Cast of Chariots of Fire
Ian Charleson
Ben Cross
Nigel Havers
Nicholas Farrell
Cheryl Campbell
Alice Krige
Struan Rodger
Ian Holm
John Gielgud
Lindsay Anderson
Nigel Davenport
David Yelland
Eric Liddell
Harold Abrahams
Lord Andrew Lindsay
Aubrey Montague
Jennie Liddell
Sybil Gordon
Sandy McGrath
Sam Mussabini
Master of Trinity
Master of Caius
Lord Birkenhead
Prince of Wales
Page 17
Startup.com: What NOT to do
•
•
The Context:
• Movie released in 2001
• Based on real company: Govworks.com
• http://www.youtube.com/watch?v=TYJzcUvS_NU
Key questions:
• What motivated the co-founders of Startup.com?
(Kaleil Tuzman and Tom Herman)
• What would motivate you as a member of
Startup.com?
• Would you trust the co-founders to lead you?
• Why or why not?
Page 18
What tools can help you
build a winning team?






Use the Trust Spider to learn how to earn someone’s trust.
Use Maslow Pyramid to explain what motivates you.
Use 1 to 1 Diagnosis to understand a team mate’s behavior.
Use Start-Stop-Keep to give each other feedback.
Use the Seven Stage Model to manage teams.
Get coaching and mentoring from the entrepreneurial Ecosystem
Page 19
Use the Trust Spider to learn
how to earn someone’s trust.
Entrepreneurship
Inspiration/
Optimism
Chemistry/
Sense of Humor
Perspective/
Humility
Vision
Communication
Integrity
Empathy
Cooperation/
Commitment
Competence
Fairness
Reliability
Responsiveness
The Trust Spider is under development by Kosnik (1995). See Kosnik for research sources.
Page 20
Mark the 5 qualities that are
most critical to earn your trust.
X
Entrepreneurship
Inspiration/
Optimism
Chemistry/
Sense of Humor
Perspective/
Humility
Vision
X
Communication
X
Integrity
Empathy
Cooperation/
Commitment
Competence
Fairness
Reliability
X
X
Responsiveness
The Trust Spider is under development by Kosnik (1995). See Kosnik for research sources.
Page 21
Compare notes with your team mates.
X
Entrepreneurship
Inspiration/
Optimism
Chemistry/
Sense of Humor
Perspective/
Humility
Vision
X
Communication
X
XX
Integrity
Reliability
X
Empathy
Cooperation/
Commitment
Competence
X Fairness
X
X
Responsiveness
X
The Trust Spider is under development by Kosnik (1995). See Kosnik for research sources.
Page 22
Get feedback from team mates on how
trustworthy you are. Fix the critical gaps.
X
Entrepreneurship
Inspiration/
Optimism
Chemistry/
Sense of Humor
Perspective/
Humility
Vision
X
XX
Communication
X
Integrity
Fairness
Reliability
X
Empathy
Cooperation/
Commitment
Competence
X
X
X
Responsiveness
Xmy trust
X = One of the top 5 qualities that I think are critical to earn
X = One of the top 5 qualities that are critical to earn team mate’s trust
= my self assessment of my own trust worthiness.
= my team mate’s assessment of my trust worthiness.
Page 23
Use Maslow Pyramid to explain
what motivates you.
Self
Actualization
Esteem/
Achievement
What motivates me to join an entrepreneurial team?
•
Making a difference?
•
Doing work that I love?
•
Challenging work?
•
Having fun?
•
Cool technology?
•
Getting funded by a top-tier VC?
•
Future flexibility?
•
Future wealth (Stock Options)?
•
A good salary?
•
Job security/low risk of layoff?
•
Other?
Social/Belonging
Safety/Security
Physiological
Sources:
Maslow, Stephens and Heil (1999), Maslow on Management,
Maslow (Stephens ed.) (2000), The Maslow Business Reader.
Page 24
Use 1 to 1 Diagnosis
to understand a team mate’s behavior.
Culture
Differences:
Motivation
Problems:
Skill Problems:
Principles Differences:
Personality Differences:
I didn’t
know!
Gender Differences
Communication
Problems :
I don’t
understand you.
What’s in it for me?
I don’t know how.
It’s against my principles
and values!
That’s the way I am. It’s
hard to change.
External Problems:
The 1 to 1 Diagnostic is based on work by Kosnik, Blair Ramfelt and Pfeifer from 1987-2000.
I don’t have the time,
money or authority.
Page 25
Use Start-Stop-Keep to give
each other feedback
Start:
Why?
Stop:
Why?
Keep:
Why?
Page 26
Use the Seven Stage Model to
manage your team.
Creating Strategies
Unresolved
• Disorientation
• Fear
Unresolved
• Mistrust
• Caution
• Facade
Resolved
• Orientation
• Acceptance
• Membership
1.
Orientation
WHY am I
here?
2.
Trust
Building
WHO are
you?
Unresolved
• Apathy
• Irrelevant
competitiveness
Sustaining Strategies
Unresolved
• Boredom
• Burnout
Resolved
• Group trust
• Spontaneity
• Data flow
3.
Goal
Clarification
WHAT are
we doing?
Unresolved
• Dependence
• Counterdependence
Adapted from: Drexler / Sibbet, © 1987
Unresolved
• Overload
• Non-attunement
Resolved
• Calls for
action
• Options
emerge
• Tasks
identified
Unresolved
• Conflict/
confusion
• Nonalignment
• Missed
deadlines
4.
Decision
Making
WHICH way?
7.
Renewal
WHY
continue?
6.
High
Performance
WOW!
5.
Implementation
HOW?
Resolved
• Commitment
to renew
• Congruence
of vision, self,
and team
Resolved
• Synergy in action
• Flow state
• Intuitive
communications
Resolved
• Sequence is clear
• Creative, productive results
• Process is disciplined
Resolved
• Roles differentiated
• Decisions Made
• Work begins
Page 27
Get coaching and mentoring from
the entrepreneurial energy ecosystem
Professors
– Like your favorite profs in energy related
specialties who worked with you on the first Energy
Crossroads Conference, as well as new kids like Alex,
Chi-Hua, Tomk and their STVP colleagues
Entrepreneurial
Leaders who are known for building
winning Teams – like the ones who come to DFJ ETL
VCs
who know the importance of winning teams – Like
the E 145 Mentors
Entrepreneurial Alumni
and the mentors they know, via
BASES, ASES, NUSEA, SWIB, SEC, ATI, and your
own network.
Page 28
Summary: Use Tools and your
Mentors to Build a Winning Team!






Use the Trust Spider to learn how
to earn someone’s trust.
Use Maslow Pyramid to explain
what motivates you.
Use 1 to 1 Diagnosis to
understand a team mate’s
behavior.
Use Start-Stop-Keep to give each
other feedback.
Use the Seven Stage Model to
manage teams.
Get coaching and mentoring from
the entrepreneurial Ecosystem
Page 29
Why do these tools matter for you?
The tools we just presented can help you
today on your E 145 Teams.
2. Use them now to increase your odds of
success.
3. Thousands of alumni from Stanford,
Harvard, NUS, KTH, and Silicon Valley
players have learned the tools.
4. If you build a team without the right
tools, your risks of losing escalate.
1.
Page 30
Part III. Team Dynamics Exercise
•
Purpose and Objectives
•
Step #1: Team Process Evaluation Sheet
•
Step #2: Discussion of Two Basic Teamwork Concepts
•
Step #3: Preparation for Team Exercise
•
Step #4: Team Exercise on Your Own
This class exercise is adapted from Managing the Small
to Mid-Sized Company: Concepts and Cases
by Jim Collins and Bill Lazier, Irwin.
Page 31
Exercise Objectives
1.
Chance to learn and practice exactly how
to improve the productivity and
effectiveness of a team.
2.
Reinforces the importance of teamwork in
new ventures.
Page 32
Recall Session 1’s “Seven
Important Skills for
Tomorrows Leaders”
•
Creativity and Opportunity Evaluation
•
Real-time Strategy and Decision Making
•
Comfort with Change and Chaos
•
Basics of Start-Up Finance and Accounting
•
Evangelism, Selling, Negotiation, and Motivation through
Influence and Persuasion
•
Oral and Written Communication
•
Teamwork
1. But what if things are going great?
2. Or what if things are going poorly?
Page 33
Step #1: Please Fill Out the “Team
Process Evaluation Sheet” Individually
Number & Name of Group: ___________________________
Group Process Evaluation Sheet
1
There is a clear unity of purpose.
There was free discussion of the
objectives until members could
commit themselves to them; the
objectives are meaningful to each
group member.
5
4
3
2
1
There is low unity of purpose – little or
no evidence that the group is widely
committed to common objectives or
that the objectives are meaningful to
each member of the group.
2
The group is self-conscious about its
own operations. The group has taken
time to explicitly discuss group
process – how the group will function
to achieve its objectives. The group
has a clear, explicit, and mutually
agreed-upon approach: mechanics,
norms, expectations, rules, etc.
Frequently, it will stop to examine how
well it is doing or what may be
interfering with its operation.
Whatever the problem may be, it gets
open discussion and a solution found.
5
4
3
2
1
The group tends to avoid discussion of
its own maintenance. The group has
taken little time to explicitly discuss
group process – how the group will
function to achieve its objectives. The
group does not have a clear, mutually
agreed-upon approach: mechanics,
norms, expectations, rules, etc. There
is often much discussion after a
meeting of what was wrong and why,
but this is seldom discussed within the
meeting itself.
3
The group has set clear and
demanding performance goals for
itself and has translated these
performance goals into well-defined
concrete milestones against which it
measures itself. The group defines
and achieves a continuous series of
“small wins” along the way to larger
goals.
5
4
3
2
1
The group has low or ambiguous
performance goals for itself. It has not
defined concrete milestones against
which it measures itself. The group
has not given itself the stimulus of a
continuous series of “small wins”
along the way to larger goals.
4
The atmosphere tends to be informal,
comfortable, relaxed. There are no
obvious tensions, a working
atmosphere in which people are
involved & interested.
5
4
3
2
1
The atmosphere is likely to reflect
either indifference (lots of side
conversations, whispering, etc.),
boredom, or tension. The group is not
genuinely engaged.
5
There is a lot of discussion in which
virtually everyone participates, but it
remains pertinent to the purpose of
the group. If discussion gets off track,
someone will bring it back in short
order. The members listen to each
other. Every idea is given a hearing.
People are not afraid of being foolish
by putting forth a creative thought
even if it seems extreme.
5
4
3
2
1
A few people tend to dominate.
Sometimes their contributions are way
off the point, but little is done by
anyone in the group to keep the group
clearly on track. People do not really
listen to each other. Ideas are ignored
or overridden. Conversations after
group meetings reveal that people
failed to express ideas or feelings.
6
People are free in expressing their
feelings as well as their ideas.
5
4
3
2
1
Personal feelings are hidden. There is
fear that these are too explosive if
brought out.
Page 34
Step #2:
Two Basic Ways to Improve Performance
Page 35
Example:
“The group never gets all of its work done because
meetings start late and, once they do start, the group
strays constantly from the tasks at hand.”
Systemic Causes?
1. The group meets at a time that
makes it difficult for all members to
arrive promptly.
2. The group doesn’t make any
effort at the beginning of the
meeting to create an agenda nor
objectives.
3. No chair of the meeting is
chosen to keep the group moving
forward and finishing on time.
Individual Causes?
1. One of the members is
chronically late, no matter what
time the meeting officially starts.
2. One of the group members
loves to stray off into unrelated
topics during the meeting -nobody feels comfortable saying
“let’s get back to the task at hand.”
Page 36
Step #3: Preparation for Exercise
1.
Circle the three lowest scores on your Group
Process Evaluation Sheet. Jot down what you
think are the root cause or causes. Categorize
each of them as either systemic or individual.
2.
If you have identified a systemic problem, write
down one suggestion that would improve the
systemic functioning of your team.
3.
For each of your teammates, list one characteristic
or action that is helpful to the group. List one
that is not helpful.
4.
Write down one thing that you would do
differently or better to improve the functionality of
your group.
Page 37
Step #4 Create “Team Dynamics” Summary
Always Keep This In Mind Please …
Is this going to be relevant and helpful to
improving the functioning of our group?
Please complete the exercise by the next class (Session 11) including
sending the summary document by email to e145-homework.
Page 38