A perfectly equal team is a fantasy for early-stage startups
That’s true. But depending on the situation, an “equal team” can clearly be undesirable.
An early-stage startup is a good example.
To sum up the image of an equal team briefly:
- the whole team decides together
- the whole team does the work together
- the whole team helps each other It’s a bit abstract, but I think that’s roughly what it means.
For an early-stage startup, “the whole team decides together” is extremely difficult to begin with. Suppose the initial team has five members: a CEO, a CTO, two engineers who used to report to the CTO (one veteran and one junior), and one junior sales/marketing person. This is a fairly common setup: three people build the product while two go out to sell it and work on fundraising. Suppose that partway through building the prototype, a technical difficulty comes to light, and the specs that have been pitched to clients as selling points until now need to change. The team faces a decision: do they pause sales until it’s resolved, or change the specs and restart the sales pitch? The CTO believes the spec change is absolutely necessary, without a doubt. The veteran engineer agrees with the CTO, but the junior engineer thinks it’s worth trying another approach first. Still, among the three engineers, the junior was overruled beforehand, so they come into the discussion with an attitude of “the spec change is unavoidable.” The sales person is furious that all their hard work up to now would be wasted, but honestly doesn’t fully understand the technical constraints no matter how many times they’ve had it explained. The CEO isn’t an engineer but knows the industry well, and thinks, “I’ve run into situations like this many times before, so let’s see how this goes.”
At this point, the team members’ perceptions and feelings are already all over the place. The sales person insists they don’t really understand the reasons, but pleads for the team to seriously reconsider. The CTO says that however you look at it, some things just can’t be helped, and in response to the CEO’s question, “How long would the fix take?”, answers, “Even in the most optimistic case, one month. Depending on how things go, we might not even see a path to a solution.” The junior engineer wonders whether it’s really appropriate to bring up “that approach” again, but since the CEO happens to be in the room, decides to propose it once more, adding a technical explanation on the spot. The veteran engineer flatly says, “It’s not possible.” The CTO backs off slightly, saying, “It might be possible, but I don’t think we have an engineer here who could actually pull it off.” But the sales person pushes back assertively: “If there’s a chance, let’s try it.”
So, will they reach an agreement?
If there were plenty of time, a decision like this might work: set a deadline, try plan A, plan B, and plan C, and if none of them pan out, give up and go with the spec change. Meanwhile, sales works on getting the client to wait.
But a startup doesn’t have that kind of time, and if they don’t land the current customer, there might not be a next chance.
A decision is needed right now.
In a moment like that, if there is a founder-CEO, it’s best for that person to make the call. In early-stage startups, it’s extremely common for there to be a founder-CEO who holds a majority of the shares. In some cases, that person may have put up almost all of the company’s founding capital themselves.
“Let him decide. It’s his company, after all.”
You often hear lines like that. It’s a distinctive situation, and in this situation, insisting on “equality” accomplishes nothing. It only needlessly slows down decision-making, and in some cases that can be fatal.
That said, having one person make the decision alone carries a genuinely real risk. “Ikkun banmin” was a doctrine of the old Japanese military, the idea that everyone except the top is equal. Temporarily, it can make decisions clear-cut, unify command, and produce results, but history tells us how it ends. For that reason, having multiple co-founders is generally considered preferable.
Originally published in Japanese at https://clazytech.com/2021/08/540/. Translated with LLM assistance and reviewed before publication.