E145 Fall 2007 Session 10 ABCs of Venture Teams + Lessons from the Movies + Team Dynamics ExerciseSlide 2Our AgendaFinding the right team mates can be difficult…Part I: ABCs of Venture TeamsA. Recruiting Key ContributorsHow should you pick your team mates for an entrepreneurial venture?Q&A with VC John Doerr of KPCBMasayoshi Son CEO of SOFTBANK CORP. (Japan)Understanding Rewards In High-Potential VenturesCompensation in Start-UpsC: Culture … The Secret to Long-Term Success?A Winning Culture Can Stimulate Innovation = f(creativity, teamwork)Even E145 Has A Culture … Recall The “Success Formula”Part II: Lessons from the MoviesChariots of Fire: What worked?The Cast of Chariots of FireStartup.com: What NOT to doWhat tools can help you build a winning team?Use the Trust Spider to learn how to earn someone’s trust.Mark the 5 qualities that are most critical to earn your trust.Compare notes with your team mates.Get feedback from team mates on how trustworthy you are. Fix the critical gaps.Use Maslow Pyramid to explain what motivates you.Use 1 to 1 Diagnosis to understand a team mate’s behavior.Use Start-Stop-Keep to give each other feedbackUse the Seven Stage Model to manage your team.Get coaching and mentoring from the entrepreneurial energy ecosystemSummary: Use Tools and your Mentors to Build a Winning Team!Why do these tools matter for you?Part III. Team Dynamics ExerciseExercise ObjectivesRecall Session 1’s “Seven Important Skills for Tomorrows Leaders”Step #1: Please Fill Out the “Team Process Evaluation Sheet” IndividuallyStep #2: Two Basic Ways to Improve PerformanceSlide 36Step #3: Preparation for ExerciseStep #4 Create “Team Dynamics” Summary Always Keep This In Mind Please … Is this going to be relevant and helpful to improving the functioning of our group?Page 1 E145 Fall 2007E145 Fall 2007 Session 10 Session 10ABCs of Venture TeamsABCs of Venture Teams + +Lessons from the Movies Lessons from the Movies ++Team Dynamics ExerciseTeam Dynamics ExerciseTom Kosnik, Alex Gould, Chi-Hua Chien, and Tom ByersStanford UniversityCopyright © 2007 by the Board of Trustees of the Leland Stanford Junior University and Stanford Technology Ventures Program (STVP). This document may be reproduced for educational purposes only.Page 2© 2003 Mark P. Rice, Babson Last Month:Idea Versus OpportunityThis Month:Realities of Business OperationsPage 3Our AgendaOur Agenda•Part I: ABCs of Venture Teams•Part II: Lessons from the Movies•Part III: Team Dynamics ExercisePage 4Finding the right team mates can be difficult…Finding the right team mates can be difficult…Page 5Part I: ABCs of Venture TeamsPart I: ABCs of Venture TeamsA. Team … RecruitingB. Compensation… RewardsC. Culture … NormsPage 6A. Recruiting Key ContributorsA. Recruiting Key ContributorsInternalKey issues: When to hire? Experience versus passion and energy? Qualifications versus motivation and character? When to use outsourcing?Founders or Initial PartnersCEO and VPsDesigners, Developers, “Architects” and Managers of Products & ServicesSales and MarketingOperations and AdministrationOthers?External Key issues: How to select? How to manage? Board Of Directors Investors Advisory Boards Professional Services and Suppliers Others?Page 7How should you pick your team matesHow should you pick your team matesfor an entrepreneurial venture?for an entrepreneurial venture?Do I enjoythem?Do I trust them?YES!YES!NO!NO!Soul matesDream team matesTeam matesPlay matesDevils’AdvocatesBozosClass matesPage 8Q&A with VC John Doerr of KPCBQ&A with VC John Doerr of KPCBQ. What is the most important part of any business plan?A. “I always turn to the bios of the team first. For me, it’s team, team, team. Others might say, people, people, people -- but I’m interested in the team as a whole.”Page 9“The way I attract these people to SOFTBANK is to explain what my dream is. It is not money because they actually come to work and we never talk about payment. They come to work, then a week passes, or longer, then we finally get around to talking about money. I’ll ask them, by the way, how much do you want? And they say, whatever you want to give me. Then I ask them, how much were you making last year? Then I give them the same amount. So they don’t come to SOFTBANK for the money. It’s for the dream that everyone has together. The dream of making the company successful.”Masayoshi SonCEO of SOFTBANK CORP. (Japan)B. Compensation and RewardsB. Compensation and RewardsPage 10Understanding Rewards Understanding Rewards In High-Potential VenturesIn High-Potential Ventures•Status Determined by Contributions to Improving Culture and Increasing the Value of the Company•Hence, Rewards Tend to Be Value-Enhancing such as Stock Options (Equity Ownership)Page 11Compensation in Start-UpsCompensation in Start-Ups•CashSalary and BonusBenefits•EquityCommon Stock Plans (Incentive Stock Options Have Favorable Tax Rates)Vesting Schedule and Stock BudgetTax Implications (IRS in USA) and Security Laws (SEC in USA)Page 12C: Culture …C: Culture … The Secret to Long-Term Success? The Secret to Long-Term Success? Definition“A strong system of informal rules that spells out how people are to behave most of the time”Two Great Quotes “The most durable asset of a venture is its culture” (Cook)“First four letters of culture spell c-u-l-t” (Collins)Page 13A Winning Culture Can StimulateA Winning Culture Can StimulateInnovationInnovation = f(creativity, teamwork)= f(creativity, teamwork)•Develop Sense of Teamwork•Include Creative and Unusual People•Understand Personalities of Key People•Develop Open Internal Communication •Remain Open to Ideas/Suggestions from Anywhere•Be the Customer•Be Willing to Experiment•Address the Issue of AutonomyReference: Collins & Lazier, ChatmanPage 14Even E145 Has A Culture …Even E145 Has A Culture …Recall The “Success Formula” Recall The “Success Formula” Show up on time (with cell phones and other stuff turned off loud please).Be nice to people (e.g., constructive comments only, listen carefully, and only one speaker at a time please).Do what you say you will do and deliver more than you promise (both in class and out).Do it with energy and passion.Reference: JM PerryPage 15Part II: Lessons from the MoviesPart II: Lessons from the MoviesChariots