Lesson: Founder Framework with Manu Kumar

Step #2 Team Design: Building on a foundation of passion

Passion and drive. Doing a startup is really, really hard. It's an emotional roller coaster which is like peaks and valleys. There's no low pass filter on that. You go high one day, you go down the next day, you go high, and you go down, and it's that yo-yo effect that takes a full emotional toll.

If you're actually going to work on an idea, you have to be passionate about that idea enough that you're willing to do it for the next 10 years. That's the question you have to ask yourself. "Am I willing to wake up every single day for the next 10 years, at a minimum, and be working on this same idea"?

Founders have different reasons for doing what they do. The most successful founders, the reason they do something is because they want to change the world, or they want to change the way something happens.

To date, I have yet to come across a situation in which somebody started a company because they wanted to make money and they were successful. Typically, when making money is their incentive to actually start a company, that company, to me, is most likely to fail. Because that is when you start taking shortcuts and you don't actually build a company for the long haul. So that passion and drive is a very, very strong thing to look at in the founding team.

The things that I think about when I'm looking at a team, the number one thing that I look for is integrity. In fact, this is something that applies both from my perspective as an investor when I'm looking at investing in a company, and also, when you as founders are looking for co-founders and planning to team up with people, integrity is the number one thing that I would advise you to look at.

If you've known somebody for a long time, that's a good way of knowing what that person’s integrity is like. If you don't know somebody for a long time, do lots and lots of reference checks. You'd be amazed at what you can find out by doing good reference checks.

Reference checking, there's an art to reference checking. Typically, if you're doing the reference check with just the person whose name is given to you as a reference, that won't lead to any interesting information. That person is already vetted by the person who you're checking the reference on.

You can get a one-off reference. You can ask the person you were referred to, "Who else can I talk to?" You go one degree further and that's when you start to actually accumulate more information on the person.

The other thing that can be designed is team and culture. A lot of the stuff that I do with my portfolio companies and what I was doing in my own startups, was really around designing the team and how to design the culture of a company. The culture of the company typically stems from the top. So whatever is the culture of the founders or the culture of the CEO, that typically becomes the culture of the company. It is fascinating to watch how that one person or two people have a significant influence on the entire company culture.

Google is a great example of this. If you take Larry and Sergey who came out of PhDs in computer science and that was the model that they were hiring at Google. Their goal is to higher really, really smart engineers. In fact, for the longest time they didn't higher any business people. They would only hire engineers. And that defined the culture of Google. Facebook had a very similar and strong engineering culture as well.

When you look at companies that have been really, really successful, the culture of the company is something that they've actually thought about and engineered and designed. It's not something that grows organically.