Start-up Tip: Surround Yourself With Smart People

Mike and I stated working on crowdSPRING in the summer of 2006. We incorporated the company in May 2007 and launched the crowdSPRING marketplace in May 2008. We’ve learned many important lessons along the way. In some ways, our experience is typical of other start-ups. In other ways, it is not. I want to share some of our adventures (and mis-adventures) in the hope that it’ll help others looking to start a company or those who’ve already launched a start-up. So, once or twice every week for the next few months, I’ll post a new tip, based on our experience with crowdSPRING  over the past two years (and my experience advising technology start-ups over my 13 year career as an attorney).

Start-up Tip 1: Surround Yourself With Smart People

Very shortly before Mike and I started working on crowdSPRING in the summer of 2006, I read an article in BusinessWeek about Alex Zoghlin. Alex and I were classmates (and at one time, debate partners) at New Trier High School. In the interview, Alex said something that’s stuck with me. When asked what his primary role was at the various successful businesses he started, Alex said that his job “is, and always has been, to hire people who are significantly smarter than I am.”

The last 13 years (since the early days of commercial activity on the Internet) have shown that most technology start-ups fail. In fact, having smart people doesn’t guarantee success. But – a start-up cannot succeed without smart people. I believe this today more than ever. And I believe that this is the most important lesson anyone who wants to start a company (or who has already started a company) can learn.

Notice that I wrote surround yourself with smart people – not just hire smart people. What do I mean?

After we completed our initial market research in the Fall of 2006, we had sketched out a very rough idea of what we wanted to do with crowdSPRING. We found three people in our network and approached them with our very early plans. When we thought about the types of people with whom we could share our plans – we wanted people who’d question our every decision. We looked for the smartest people we knew because we needed a reality check. We needed to find skeptics – people who would not be afraid to tell us we would fail, and who would patiently explain HOW we would fail.

One of the three had founded and ran a very successful software company that was responsible for a substantial amount of innovation in games development for consoles and PCs. Another taught at a Top 2 MBA program in the United States and also had 17+ years of successful operating experience with a Fortune 500 company. The third owned and operated a very successful business.

I still remember the day we met with the MBA professor – we walked out of that meeting (this was early Fall 2006) feeling like we just went 10 rounds with Muhammad Ali. We could easily have folded then – in fact, that’s precisely what he suggested we do! But that meeting re-energized us. We spent the next 2 weeks researching, revising, re-revising, re-analyzing, and re-thinking. After 2 weeks, our ideas were crisper, stronger, more relevant, more refined, and smarter. We could not have done that without the pounding we took two weeks earlier.

We had the same experience with the other two people. After each meeting, we had to go back and deconstruct our thinking, review and rethink our plans, refocus our efforts, and improve what we were planning to do. And with each meeting, rather than become discouraged, we became crisper in our thinking, sharper in anticipating problems, and smarter about the future. All three people (and there were others too) pushed us hard to refine, rethink, re-research, and revise our plans.

We applied the same principles when building our team. We wanted to hire people who were significantly smarter than we were – people who would push us to be better and people from whom we could learn. We looked for people who were motivated to build something out of nothing, who were not afraid to fail, who were challenged by the fast-pace of a start-up, who were comfortable challenging our own thinking and assumptions, and who were comfortable challenging the status quo. We didn’t want people with a lot of attitude or those with unbearable personalities, and we’ve been very fortunate in that regard.

We weren’t looking for people with a strictly fixed skill set. In a start-up, there are few specialists – everyone is asked at one time or another to wear multiple hats (Mike and I take turns doing the dishes). We wanted people who had great skills in their core area, but who could also contribute on many other levels.

How do you know if someone who works for you is smarter than you? And even more importantly, how do you know if someone you are considering hiring is smarter than you?

There are a few telltale signs. During the interviews, focus on that person’s experience in prior jobs. For example: are they most proud that they recommended new ideas and solutions at those jobs, or most proud that they executed ideas and solutions recommended by others?

If you’ve already hired the person, ask yourself how often that person recommends great ideas that you didn’t think about first. Do they do this every day? Multiple times per day? Every week? Every month? You want to hire people that’ll bring great ideas to the table many times per day. Those are the types of people who will make your company better.

Now – there is an important distinction between smart people and intelligence. When I talk about smart people, I certainly include people who are intelligent. But mere intelligence – the ability to solve logic puzzles, for example – doesn’t mean that person is the right person for your team.

So what’s the difference? We looked for people with drive – those self-motivated to succeed. People who will not take failure as a defeat. People who will work hard to make sure that they succeed. People who will want to make everyone else better and smarter. These are rare traits – and not every highly intelligent person has them. Some people have them, while others don’t.

We’ve been very lucky to have built a great team in such a short amount of time. We’ve made several hiring mistakes along the way (which we’ve corrected by being disciplined and prompt – more on that later). By focusing on hiring smart people and creating an atmosphere that gives them every opportunity to contribute new ideas and solutions – we’ve given crowdSPRING a better chance to succeed and us a greater opportunity to learn. And that’s one of the reasons I love coming to work on Mondays.