Step 3 - Compose a Team

While the founding team in any startup is important, given the rapid scaling of an ExO company—with its very small footprint in terms of resources—the careful composition of its founding team is especially critical.

The key to putting together a successful ExO founding team is that everyone must share a passion for the MTP. Ben Horowitz, a co-founder of Andreessen-Horowitz, one of the world’s most successful VCs, noted the importance of shared passion in his recent book, The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers: “If founders are in a startup for the wrong reasons (money, ego), it often degenerates into a nasty situation.”

The following roles are critical if a founding ExO team is to deliver diverse backgrounds, independent thought, and complementary skills:

• Visionary/Dreamer: This individual’s primary role is devising and revising the company’s story. The founder with the strongest vision for the company comes up with the MTP—then holds the organization to it. This role will drive future hires in marketing and sales.

• User Experience Design: This role focuses on users’ needs and ensures that every contact with users is as intuitive, simple, and clear as possible.

• Programming/Engineering: This person is responsible for bringing together the various technologies required to build the product or service.

• Finance/Business: The business function assesses the viability and profitability of the organization, is the cornerstone of interactions with investors, and manages the all-important burn rate.

In The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators, co-author Clayton Christensen approaches the skill portfolio question slightly differently, identifying two distinct sets of skills:

• Discovery Skills: The ability to generate ideas—to associate, question, observe, network and experiment.

• Delivery Skills: The ability to execute ideas—to analyze, plan, implement, follow through, and be detail-oriented.

These are just two of many ways to put a founding team together. Whatever the approach, however, founders must intrinsically be motivated self-starters. Most of all, in the face of rapid growth and change, founding team members must have complete trust in one another’s judgment. Let’s also remember the leverage brought by ChatGPT and similar tools

Consider the PayPal story. Peter Thiel told his co-founders (Elon Musk, Reid Hoffman, Luke Nosek, Max Levchin, and Chad Hurley) that they all should work together as friends rather than more formally as employees. That concept famously cascaded into their hiring process—the company regularly sourced employees from amongst the friends of their current employees. Not only was PayPal very successful as a company (it was sold to eBay for $1.2 billion in 2002), but the friendships that grew out of it were equally successful. The original team is now known as the “PayPal Mafia,” and its members have helped one another on subsequent startups, including Tesla, YouTube, SpaceX, LinkedIn, Yelp, Yammer, and Palantir—companies that today have a total market cap approaching two trillion dollars.

The pace of growth of an ExO places an extra emphasis on a fully synergistic core team. As Arianna Huffington says, “I would rather have somebody much less brilliant and who’s a team player, who’s straightforward, than somebody who is very brilliant and toxic to the organization.”