Even best ideas fail if teams are isolated

The usual scene at an incubator or an accelerator on the day of VC presentations for funding is that start-ups are visibly nervous, accumulating content and putting powerpoints together. After all, venture capitalists and private investors do strict diligence. They run every document that is submitted for asking for funds through a microscope. They read every punctuation on every financial record of the business.

The usual checklist consists of seeing if the company has an innovative business model, how big the plans of scalability are, the growth plans of the company, whether the idea is sustainable in long run and if it will hold market value as an interesting venture? Even if its a “Me Too” idea, one has to see if the repeat value has enough consistency. Advanced data analytics tools are applied and the filtration process is stringent.

But when it comes to evaluating the start-up team, presentability combined with intuition and hunches are the applicable methods. VCs look at teams, ask loads of questions on prior start-up experience, product knowledge and industry skills and they predict the success of a new venture. They also check how compatible teams are with each other, at least until they exit with investments with decent returns. 

But is this sufficient for a team to work well together? For a successful start-up to become big, it is crucial to have a team that has a shared passion to begin with. The vision and mission come slowly but the ability to stick together through thick and thins is the first requisite. 

In 2004, a group of founders who had miserably failed at first attempt of making a successful venture came together to build another venture. A big vision and an innovative idea needed huge funding, and this came with the baggage of big failure just a while ago. The were many challenges other than finance - creating an avatar-based virtual world with user-generated content, online e-commerce portal and easy-to-navigate technology. And that was in 2004. The only thing which was intact and in place was the team that stuck together to a core belief. They built a company again and became one of the biggest avatar-based social network called IMVU. In 2015, the firm had gross revenue of $40 million.

Mistakes are bound to happen when there is an innovative idea and most of the business plan is on papers. But if the team adapts and grows together, then it is possible to pull through any kind of extreme uncertainty. Most of the times, the start-ups themselves are unaware of how the product is going to look like as a finished good or how many are going to be real customers. It's hard to predict the future even if they pull on a great business plan. There is no guarantee that it would look exactly how it is on the slide. Planning and future forecasting come from past success. Start-ups lack that completely most of the times. 

Rasik Pansare, co-founder of “Get My Parking” mentions that he joined this smart parking solutions company after a year of being founded in June 2014. The threats from organised parking mafia or financial crunch did not deter him from quitting his job and joining the founder Chirag Jain. The faith in the team and the ability to see through the most challenging times - from crashed servers to having no funds - finally got them not only three large-sized funds. They also got an appreciation from PM Modi for managing 2016 Kumbh Mela for 2,00,000 parking bays. 

If you are a start-up or a new upcoming entrepreneur, listen to your team. You need not follow everything as a gospel of truth, but emphatically, it does make sense to make notes of every suggestion. This helps you see which parts are brilliant and which are crazy. Remember that most predictions come out of a balancing act of crazy thoughts with clear actionable strategies. 

In the end, every business is about people management. An entrepreneur needs to be the best manager that a company can have. Only a people-centric person builds an enterprise and makes it big. No one who has a solo business made it big because it is the team who builds it together. 

The writer is strategic advisor and premium educator with Harvard Business Publishing