I know that this sounds paranoid – I don’t think someone is out to get me (well maybe). In business you have to watch your back and often it is hard to know the people you can trust. There are individuals motivated by the wrong purposes. Intentions are not always clear and frequently hidden.
I found through the years that it is often hard to tell the good from the bad and the ugly if you are not careful. For this reason, you need to de-risk your venture with the best possible hires, independent board members and investors. It is often easy to settle for the money at hand or to forget the importance of a truly independent director or a first class executive. If your goal is to surround yourself with the best people for a particular type of venture, your bad hires/relationships will be mitigated. You will not be perfect, but you will have enough rational thought in your company to prevent internal destruction. At that point, only the market can defeat you or you defeat it.
Too many companies are destroyed internally before they can succeed in the market through maneuvering, politics and irrational behavior. You can see all these traits in many organizations and they are greatly magnified/ intensified in a startup. This issue is why the best investors invest in people as much as ideas. Everyone will say that they invest in people/ teams - it is easy to say and hard to really mean.
Sometimes you have to receive a few prior scares to see things clearly. What I have said here is not new - many people in the investment community and startup world say it. However, companies still run into trouble every day because they don’t mean it.
Here are the rules:
1. Every executive hire matters a lot – hire the best you can find and don’t settle. Speed matters, but hires matter more than speed. This is the “speed” exception for a startup because in most cases speed is of the utmost importance.
2. Make sure your investors and directors meet the same quality as your hires. If you would not want to hire them, why take their money or put them in a position of influence? Speed once again matters less than quality.
3. If you hire the best and work with the best, trust is not something you need to focus on as much. Rational thought will prevail and you will be free to live or die in the market without the fear of fratricide.
fratricide [ˈfrætrɪˌsaɪd ˈfreɪ-]
n
1. the act of killing one's brother
2. a person who kills his brother
3. (Military) Military the destruction of or interference with a nuclear missile before it can strike its target caused by the earlier explosion of a warhead at a nearby target
[from Latin frātricīda; see frater1, -cide]
