UPDATED 11:34 EDT / JANUARY 28 2013

Love the Ones You’re With. Why Startup Success Depends on Relationships

Co-authored by Ben T. Smith, IV, CEO and Doug Kilponen, COO of Wanderful Media

“What people are doing when they are forming a band is what an anthropologist would call forming a clan. They are a group of people who may not be genetically related but share interests of some kind and have pledged loyalty to each other.”
“From the Sky Down”, U2 documentary

Starting a company, like forming a band, requires faith and depends on loyalty. Having worked together on two different startups over the course of several years, it has become clear to us that loyalty is the essential, but often unsung secret to success. While the media creates a myth of the solo star performer, the reality is that your business, and your future, depends much more on whom you take along for the rollercoaster ride and how you share the experience.

The Hungry Years

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Most startup founders can jot the idea for their business on the back of an envelope. The real work starts as you sweat, argue and agonize over every detail; twenty words or less becomes months of minutiae. It’s frustrating and painstaking, but in the early days, it’s you and your team against the world, fired up by passion and chasing an idea you all believe in. That faith in each other moves you from one line of code to the next, one venture pitch to the next. It’s exciting to be building something new, creating an entirely new sound, fighting the fight together.

During this phase, as you wrestle with the minute details of your company, existential questions about your purpose will plague you. Can this survive? Am I wasting my time? Are all of us crazy? Plenty of critics will tell you that it sounds terrible, and it will never work. Just like U2 rehearsing in an empty classroom and playing to half empty rooms, you believe passionately that you’re laying the foundation for something great. The result, if you’re lucky, is that sense of shared pain develops into intense loyalties that will keep you all sane through a crazy process.

The Difficult Second Album

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You are going to need those loyalties. The dirty secret of the Valley is that it’s actually much easier in the early stages. As hard as it is to build something from nothing, and drum up the money to keep going, there’s energy in rebelling, in being our gang against the world. What we didn’t anticipate when we started out was how success really tests the strength of a team.

The greater the success, the bigger the critics’ daggers. At the same time, internal pressures start to build. Doubt sets in and, as the team starts to second-guess itself, you lose faith in the risk-taking that led to success in the first place. Instead of reaching for the stars, you start to worry about protecting what you’ve already built and the whole feeling at the company starts to change.

Then, people start to wonder whether the grass is greener on the other side. When a team finds success, people can get cocky. Recruiters start to call more frequently, and with better offers. Sycophants puff up egos and flatter members of the team that they were the real talent; that they’re better than everyone and deserve more. Fingers get pointed at “freeloaders”, team members begin to fight each other… and the band begins to break up.

At this point, the easier choice for many is to believe the hype and flattery, and to walk away. The Valley is littered with the remains of companies that imploded in acrimonious breakups and there are plenty of former colleagues and friends who no longer even talk to each other.

There’s no doubt that new opportunities often sound more rewarding; you get to work on something new and escape the baggage associated with your current project. But this is the time when you have to take a clear-eyed look at what you really have, including the relationships you have built.

Never Can Say Goodbye…

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Sometimes that will lead people to the more difficult choice of staying with the same team, grinding through the same project and working to build something lasting. Sometimes, it will mean a more amicable separation where parties agree that the project has reached its natural conclusion but which leaves the door open for people to work together on new projects in the future.

For example, take a look at what’s happened to alumni from Odeo who went on to found Twitter, or Topix who are now finding great success with Blekko. Our team at Wanderful includes talented people we worked with at Merchant Circle and CodeGear. The teams that have formed, reformed, gone onto different opportunities but continued throughout to nurture the loyalty and friendships that were built in the early days are thriving.

Remember, you may not make any money with your current project; it may be a stepping-stone that helps you go further next time. And going further is easier when you work with people who already trust and respect each other. You’ve been through the fire once (or twice!) you know you can survive and that nobody is looking to take advantage. That strong base gives you a freedom to imagine on a much greater scale.

So, of all the decisions you make in starting a company, choosing the right team is the one that’s going to have the most impact on your success and your future career. It’s hard enough to make a product work even when you have a team that is fully behind you. You can’t hope to succeed unless you choose to work with people who have integrity, a sense of shared purpose and a desire to create something meaningful. Once you find those people, be good to them.

“The only things Mick and I disagree about is the band, the music and what we do.” – Keith Richards

Being good to your team isn’t about free lunches and glitzy outings (although that’s fun too). It means being clear about what people need to achieve and also trusting that they will go above and beyond that in ways you can’t yet imagine. Having this level of respect for each other also means having the freedom to disagree. It’s perfectly legitimate for someone to challenge you, or for you to challenge them. That ability to encourage honest debate and to push one another for the good of the company is the sign of good leadership and it’s fundamental to developing creative solutions and sustainable businesses. Ultimately, teams stay together when they believe they still have something to new say, when they believe their best work is still ahead of them, when there are still new songs to sing.

When you have these kinds of trusted relationships, you can really begin to appreciate the ride, to love the process, and to enjoy the benefits of building supportive networks with colleagues and teammates who spin off into other ventures.

It’s the nature of life in the Valley that you’ll run into the same people over and again. Getting beyond the challenges of failure— and especially of success— with a team creates bonds that continue on for years. The trick to being the Rolling Stones, now embarking on a 50th anniversary tour, and not Fleetwood Mac, never amounting to much after an acrimonious breakup, is to seek out and take care of those people, wherever you end up.

If you get that right, the magic will last way beyond one gig.

About the Authors

Ben T. Smith IV is CEO Wanderful Media, a startup focused on reinventing online discovery shopping with a social experience. He is also a Venture Partner at Accelerator Ventures and co-founder ofMerchantCircle.com and Spoke.com Ben blogs at btsiv.com, and you can follow him on Twitter at @bentsmithfour.

Doug Kilponen joined Wanderful Media as chief operating officer (COO) in May, 2012. He previously served as executive vice president of Business Development for Reply! following its purchase of MerchantCircle, where Doug was senior vice president. A founding executive team member of MerchantCircle, Doug held roles in product management, customer acquisition, and business development.

photo credit: jurvetson via photopin cc

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