Investors often look at the technology, idea and financial viability and make investment decisions based on these dimensions. Some also look at the founders as individuals. Do they have what it takes to build a successful business? By doing so, they overlook one of the core components for success- the New Venture Team (NVT). The NVT can be composed of talented individuals, but if they are not operating as a high-performing team, the investment is at risk.

We tend to think about teams as a normal way of work, in many cases even natural. We all participate in teams throughout our lives. However, NVTs are different from a small team in an established organisation. First, they have a much more significant impact on the organisational success. If a certain team in a corporate is not functioning well, the organisation will survive. However, if the NVT can’t work together, the company is at a huge risk.

NVTs have tremendous impact on the new venture. They set the venture for success or failure!

Being a team member at an NVT is a complex task that is very different from participating or leading a functional team. Team members of NVTs have a greater managerial discretion and their decisions need to take into consideration the bigger picture, not only their comfort area of expertise. They are challenged on a daily basis in unfamiliar ways.

The NVTs build the foundation of the organisation from scratch. Only a high-performing team that works very well together can build a sustainable start-up. Not only that, they need to lead the venture through the different life cycle stages. The assumption that the team evolve together with the start-up is wrong. It needs to lead the start-up! In other words, once the start-up reached a milestone- let’s say first major client- the team needs to then proactively change and lead the organisation to the next milestone (scaling up). It is a team that operates in a non-stop evolving, out of the comfortable zone. How many people do you know that are happy to keep on stepping out of their comfort zone? How many teams are good at keeping up the relationships together through the roller coaster?

Last but not least, every organisation has a culture. The culture allows people to know how to operate and what behaviours are expected of them. In start-ups, NVTs need to establish the culture. They must agree on the values and norms; otherwise, their behaviours will go in different directions. Before the culture is established, the team is not a team- certainly not high performing one. So, it is the opposite of what many people think. It is not that a high performing NVT creates a good culture, but that the culture the team builds helps it become a high performing team.

Nevertheless, there is evidence in the literature suggesting that sole entrepreneurs fail more often the NVTs in creating sustainable start-ups.

How come? Building strong NVTs (based on diversity of thinking and with the adequate team processes) provides great strategic and operational competitive advantages.

In my next posts, I will discuss how to create impactful NVTs:

  • The core components of NVTs- diversity of thinking and team processes- what they are and how to achieve them
  • What it means to be a high-performing NVT
  • How to build high performing NVTs

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Want to share your thoughts about NVTs, culture and start-ups? I would love to hear from you.