Author Archives: mpweimar

The Role of Founders in Building Teams (Ent 600)

“The Role of Founders in Building Teams”

Many founders of new small businesses may have the temptation to do everything themself.  There are many reasons why this is the case. When an idea is your own, the founder may believe that only they are able to properly execute their plan.  They have spent countless hours thinking and developing their idea. Bringing another person into the business that clearly will not have the amount of passion and knowledge of the business will slow down their growth is what one might think. This is furthest from the truth.  While the new business owner is shipping product, sweeping floors, or answering the phone, he could be pounding the pavement and developing sales and customer relationships.  One may think that they do not have enough money to bring on new employees.  This is also flawed thinking.  There are many options that could be considered including hiring part time employees, looking for other founders to share in the startup costs, or even meeting an angel investor.

Once the decision is made that is necessary to build a team, one must decide on what functional areas must be created.  The founder needs to take an inventory of their talents that they possess. Most likely a founder has a passion for an idea and a vision for his company, but lacks the expertise in important functional areas. These include may include developing a marketing strategy, managing a sales team, handling the finances of the business.  There are many ways that this can be handled. The new founder can be conservative and hire consultants. This would save on overhead costs of payroll and benefits.  The disadvantage would be that the new organization would not build a team with forward momentum and a common vision.

It is the founder’s role to decide on the vision for their new organization.  This should be done prior to building a team.  It is paramount to know where your new startup is headed before bringing others onboard that may or may not possess the same vision.  This vision should be put in writing in the form of a mission statement and shown to potential candidates. “Our mission is to be Earth’s most customer-centric company. This what unites Amazonians across teams and geographies as we are all striving to delight our customers and make their lives easier, one innovative product, service, and idea at a time.”  That is the mission of statement of amazon.com. It is stated on the top of their job application page. People that are completely focused on the customer and innovators are traits that Amazon is looking for when their team is interviewing. Hiring the wrong candidate who ultimately acts differently from the mission of the company, can cause tension amongst owners and employees alike.

Although it is important to have all employees moving in the right direction, it is also important to have a diverse team.  A diverse team provides ideas from multiple viewpoints.  It is about cultural diversity and having people from a variety of backgrounds on your team will will increase the likelihood of great ideas coming from their collaboration.  The key is again is to make sure that you are hiring the right individual for the organization. Their attitudes and skill sets need to match the vision of the company.

The founder of a new startup will set the tone for the team they create. Will their team will be built on entrepreneurship or micro-management?  Will it be based on creativity or rigid procedures?  By understanding the founder’s ultimate goal for the company, they can decide who will be their best teammates.

References:

Hiring for Cultural Compatibility, Johnathan Kestembaum, Counterpoint, July 1, 2018

What Are Your Cultural Non-negotiables?, Regis Courtemanche, July 1, 2018

www.amanzon.jobs.com

Three Tips to Build a Diverse Team and Strengthen Your Business, Raquel Baldelomar, Forbes, November 22,2016

The Founder’s Dilemmas: Anticipating the Pitfalls That Can Sink a Startup, Noam Wasserman (2012)

Ent600 Organizational Chart Assignment

I have created an organizational chart for a hypothetical drone survey/photography business. Various positions are color coded to signify whom might have similar positions within the organization. For example, executive level positions will be color coded in light blue. Sales positions are lime green.

References:

The Founders Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink A Startup, Noam Wasserman, 2012

Creately.com

“Building Social and Financial Capital” Week 3 Blog Post

“Building Social and Financial Capital”

“Is now the right time?”  That is a question any new business owner has probably anxiously pondered prior to starting their operation. There are many factors that go into the decision of whether or not to start a new business.  “Do I have the passion for this business?” That is another question one should ask themselves. Probably at the top of the list of questions is whether or not one has the financial capital to start a business. Everyone realizes that financial capital is a must to start a business.  Many hopeful business owners have had sleepless nights trying to figure out how to raise the money to begin their entrepreneurial journey. There are many ways that a small business can gain financial capital.  “Bootstrapping” is seemingly the most common. This is where a small business owner will raise his own money through hard work. The owner might have a second job outside of their new business. The founder taking minimal or no salary in order for the business to develop is not uncommon in the beginning stage of many startups. Another way is to take out a small business loan. There are many programs available through the Small Business Administration. There are some disadvantages to SBA loans. There are usually strings and bureaucracy involved. Still another way to raise money is to beg and borrow from love ones. Tell them how important it is for you start your business and maybe they will help in the effort.

Few new business owners have considered the need for social capital. Having social capital might be considered axiomatic or maybe even taken for granted. Social capital is an intangible asset that a business can claim.  This kind of capital is gained through networking. It can be achieved through meeting potential clients at a chamber of commerce meeting. Through social media, there is an endless possible stream of social capital. It can be obtained through the owner’s years of experience in a particular industry. For example, someone who has worked for a plumbing contractor for several years decides to start his own operation. That person would bring contacts that he has gained over the years to his business. This might included home builders that he has met or homeowners that liked his work. 

Social and financial capital “go hand in hand.”  By adding partners to the business, one can increase both social and financial capital.  The new parter can bring additional financial assets to the table.  Social capital can be gained through new partners. Some people that the new partner is connected with might be known by the original founder, but many are not. Better costs might be realized by finding new vendors or new potential clients might be introduced. Additional partners might be able to bring in an angel investor. An angel investor is an individual who believes in your startup and is willing to invest some of their personal capital into your business.

Most entrepreneurs are naturally creative. By remembering the importance of social capital and how it relates to financial capital, a successful entrepreneur can use that innovative talent to expand their network. This network can be used to gain the financial capital their business needs to get off of the ground.

References:

The Founder’s Dilemmas:Avoiding and Anticipating the Pitfalls that Can Sink a Startup, Noam Wasserman, 2012

4 Reasons Social Capital Trumps All, Chris Cancialosi, Entrepreneurs, September 22,2014

4 Realistic Ways to Fund your Business, Forbes, Brent Gleeson, August 29, 2013

Differences Between an Angel Investor and a Venture Capitalists, Business.com, Will Jiang, August 28,2017

Maximizing Wealth Vs. Maintaining Control

Week 2 Discussion, Ent 600

“Maintaining Control vs. Maximizing Wealth”

According to Noam Wasserman in The Founder’s Dilemas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup (2012), “Founders’s two most common motivators are (a) building wealth and (b) driving and controlling the growth of their startups.” In some cases, you as the founder of a new startup may find that the two concepts are mutually exclusive. You might need to give up control to some degree in order to maximize wealth.  Some founders might have an issue with giving up control due to pride however.

How much control you give up of your fledgling startup is an important process.  It is a process because you may have the idea that you will maintain complete control of the business upon conception.  In order to maximize wealth you may have to bring in others that have different talents into the mix. These decisions are important as they could have considerable effects on the business both negative and positive.

You should do an honest evaluation of the needs of your startup. Do you have the skills necessary to start the business.  For example, there may be technical aspects to the idea that you need to acquire. Another question is whether you have the funds available.  A new founder may need to recruit investors in the business.

Once you decide to bring others into the fold, there are another set of decisions to make.  Should that person be considered a cofounder? Should you bring in more than one cofounder? The answers to these questions depend on the individual.  How much talent or funds they bring to the table would be a determining factor. Certainly, sharing the title of founder would require some level of humility amongst an individual who is attempting to bring an idea that he solely produced to the market. However, this might be necessary to fully realize the potential of the startup.

Having more than one founder would mitigate risk taking due to having to collaborate on decisions.  Entrepreneurs tend to be known risk takers by nature.  Having a partner to consult lessens the likelihood of making a snap decision that one might regret.

Once the decision of whether or not to have a cofounder(s) has been made, it is important to make sure the person is right for the job. According to “Entrepreneur,” the first two questions one should ask is “Does my potential parter have the skills I lack?” and “Does my potential business partner share my vision for the company?” (Entrepreneur, Phil LaDuke, 5 Questions to Decide If you Need a Business Parter, February 20, 2017).  Difference of opinion could have a long lasting effect on one’s relationship and business. In addition, if the potential cofounder does not have the skillset you are looking for, additional cofounders or employees might be required further diminishing wealth.  Other decisions will also need to be made such as dividing equity in the company.

Whether or not to maintain control or maximize wealth is not just one decision. It is indeed a journey of many decisions which build upon each other. Overall, bringing additional people with added talent, funds, and connections into your new organization will increase your odds of survival!

References:

“The Founder’s Dilemas: Anticipating and Avoiding the Pitfalls that Can Sink a Startup”

Naom Wasserman (2012)

“5 Questions to Decide if you Need a Business Parter”

Phil LaDuke, Entrepreneur, 2/20/17

“The Study of Bias in Entrepreneurship”

Stephen X. Zhang, Javier Cueto, Baylor University, 2015

Welcome to My New Entrepreneurship Blog

Why Entrepreneurship?

You miss 100% of the shots you don’t take.

— Wayne Gretzky.

This is my first post on my new blog. I am starting this blog as part of my pursuit toward a Master of Entrepreneurship degree from Western Carolina University. Thinking long and hard about what program to pursue, I settled on the M.E. program from WCU. It is because of the real world learning in this program that I believe it bring me to new heights. I can already see how challenging it will be, but I am going to take my shot!