A blueprint for building a great startup founding team

Extra Crunch Newsletter

Friday, August 06, 2021 • By Walter Thompson and Annie Siebert

Welcome to Extra Crunch Friday Image Credits: Klaus Vedfelt / Getty Images Assembling a startup team is harder than assembling 10 IKEA dressers, and the stakes are much, much higher. Starting with the assumption that 90% of startups will fail and the most successful ones take an average of six years to IPO, founders must make careful decisions about whom they invite to join the core team. Will that stellar engineer become a great CTO? Should your product person be opinionated, or a team player? Are you even the best choice for CEO? ThoughtSpot CEO Sudheesh Nair shared some of his thoughts about building a sturdy leadership team and drafted a thorough checklist for entrepreneurs who are putting a crew together. His initial advice? “Investors love founder-CEOs, and founders are often fantastic candidates for this role. But not everyone can do it well, and more importantly, not everyone wants to.” In a related article, Gregg Adkin, VP and managing director at Dell Technologies Capital, shared the framework he’s developed for helping founders set up their board. Choosing the right mix of people can impact everything from fundraising to hiring: "Investors often ask founders about their board [because] it says a lot about their character, their judgment and their willingness to be challenged," he writes. Miranda Halpern spoke to Amsterdam-based coach Ward van Gasteren for our latest growth marketing interview, which is free to read. In their discussion, van Gasteren addressed misconceptions about growth hacking, the mistakes most startups are likely to make, and the distinctions he draws between growth hacking and growth marketing: "Growth hacking is great to kickstart growth, test new opportunities and see what tactics work," he tells us. "Marketers should be there to continue where the growth hackers left off: Build out those strategies, maintain customer engagement, and keep tactics fresh and relevant." Thanks very much for reading Extra Crunch this week; I hope you have a great weekend. Walter Thompson Senior Editor, TechCrunch @yourprotagonist Read More

What Square's acquisition of Afterpay means for startups Image Credits: sureeporn / Getty Images In his first column since returning to TechCrunch, reporter Ryan Lawler considered the ripples Square’s purchase of Afterpay may send across the pond of buy now, pay later startups. For commentary and perspective, he interviewed: Dan Rosen, founder and general partner, Commerce Ventures Jake Gibson, founding partner, Better Tomorrow Ventures TX Zhuo, partner, Fika Ventures Matthew Harris, partner, Bain Capital Ventures The investors he spoke to agreed that deferring payments helps drive e-commerce, “but scale matters and long-term margins look slim for BNPL startups,” reports Ryan. Read More

Prices increase tonight on all TechCrunch Disrupt 2021 passes Sponsored by TechCrunch For a few more hours, you can buy a ticket for less than $99. Read More

Enterprise AI 2.0: The acceleration of B2B AI innovation has begun Image Credits: Ivan Bajic / Getty Images Businesses have been deploying AI solutions for 20 years, but few have achieved the outstanding gains in efficiency and profitability promised when the technology first appeared. But there's a burgeoning new generation of enterprise AI, Eshwar Belani, an operating partner at Symphony AI, writes in a guest column. "Companies on the leading edge of AI innovation have advanced to the next generation, which will define the coming decade of big data, analytics and automation — Enterprise AI 2.0." Read More

Embodied AI, superintelligence and the master algorithm Image Credits: Joan Cros Garcia-Corbis / Getty Images Over the next 18 months, one technologist says the increased adoption of embodied artificial intelligence will open a path to superintelligence — incredibly powerful software that dwarfs anything the human mind could produce. “All the crazy Boston Dynamics videos of robots jumping, dancing, balancing and running are examples of embodied AI,” says Chris Nicholson, founder and CEO of Pathmind, which uses deep reinforcement learning to optimize industrial operations and supply chains. "The field is moving fast and, in this revolution, you can dance." Read More

A lot of cash and little love: An insurtech story Image Credits: Nigel Sussman The Exchange looks at the valuations of public insurtech companies and considers what that means for startups — but from a slightly different perspective. "We'd typically riff on the new values of public neoinsurance companies and use that data to work our way into a guess concerning what the price declines might mean for related startups," Alex Wilhelm writes. "Taking public-market data and using it to better understand private markets is pretty much the national pastime of this column. "Not today." Read More

5 factors founders must consider before choosing their VC Image Credits: Anastassiia / Getty Images The fact that the globe is awash in venture capital should not be news to readers of this newsletter. For founders, it means more than just fat checks, Kunal Lunawat, co-founder and managing partner of Agya Ventures, writes in a guest column. "Founders would be well served to go back to the basics and focus on the principles of fundraising when determining who sits on their cap table." Read More

Neobanks' moves toward profitability could be the path to public markets Image Credits: Nigel Sussman Alex Wilhelm checks in on results from Starling Bank and Monzo to see what their most recent financial figures say about the state of neobanks overall. "Although some neobanks are managing to clean up their ledgers and work toward profits — or reach profitability — not all are in the black," he notes. But among those that are? "At least a portion of the neobanking world is financially stable enough to consider public offerings." Read More

Founders must learn how to build and maintain circles of trust with investors Image Credits: MicroStockHub / Getty Images The red-hot venture capital market may give founders lots of investors to choose from, but the most important thing is being able to trust and rely on your investors, Ripple Ventures' Matt Cohen and True's Tony Conrad write in a guest column. "It's simply not possible to have numerous deep and meaningful relationships to extract maximum value at the early stage from seasoned investors," they advise. Read More

What's the board's role in an early-stage startup? Image Credits: A-Digit / Getty Images Assembling a board of directors is not merely about finding individuals who can aid your early-stage journey, Gregg Adkin, the vice president and managing director at Dell Technologies Capital, writes in a guest column. The composition of the board can also impact your fundraising. "Investors often ask founders about their board [because] it says a lot about their character, their judgment and their willingness to be challenged," he writes. Adkins offers a framework he calls "SPIFS" — for strategy, people, image, finance and systems for compliance — to aid founders in setting up a board. Read More

Do bronze medals ever make sense for unicorns? Image Credits: Nigel Sussman In the wake of Deliveroo's plans to abandon the Spanish market after the country passed legislation requiring companies dependent on gig workers to hire employees, Alex Wilhelm wondered about the battle for smaller markets and whether third place is sufficient. "One company exiting a market is not a big deal, but we were curious about Deliveroo's comments regarding the need for market leadership — or something close to it — to warrant continued investment," he writes for The Exchange. "Is this the common reality for startups battling for market position, no matter if those markets are cities or countries?" Read More

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