WHEN Valerie Vetter had the idea for Aftering.com, an online service to help people plan a funeral, the first thing she did was to get a team together. Four people work on the technology start-up, based at the National Digital Research Centre.
Having three talented people willing to come on board and back her idea was an early sign she was on to something. It also meant the business was more likely to get off the ground.
“I knew I couldn’t do everything by myself, that if I was going to do this I needed a variety of skills,” said Vetter. “Having a team gives you perspective too. When you’re starting a business, you can suffer from a kind of blindness, not seeing things that are obvious to others. And it just helps to have people to bounce ideas off.” Last week the company launched its first funeral planning app, simply called Aftering.
A strong team can be the difference between success and failure. “It’s the most important factor in predicting start up success,” said Michael Culligan, national director of the Halo Business Angel Network. “Certainly, people invest in teams.”
Start-ups need talent the most, says Culligan. “Unfortunately, it’s also when a business is least likely to be able to pay for it,” he said. One way around this is to offer equity in the business. “It’s something that needs consideration,” added Culligan. “It’s not uncommon for promoters to fall out and, when that happens, promoters with shareholdings bring added complications.”
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His advice is to offer equity after a set period. He encourages people to test their working relationship.
“First-time entrepreneurs tend to be so busy they can’t see the wood for the trees,” said Culligan. “At the start, you are so driven, there is a tendency to want to do everything yourself. Those with experience know that it is so important to surround yourself with people who are better than you as early as possible.”
In some cases, there can be a marked resistance to building a team. “We find that for many start-ups there is a commitment issue,” said Eibhlin Curley, head of enterprise at Dun Laoghaire-Rathdown local enterprise office. “Going from being a one-man band to a two-person business is in many ways an even bigger step.
“All of a sudden you are responsible for someone else’s salary. You’re worried there won’t be enough left over to pay yourself. Psychologically, it’s a big deal.”
Another issue is expectation management on both sides. “Often the business owner expects the first hire to be as passionate about the business as they are, and do the 80-hour weeks that they do, and all for €25,000 a year,” said Curley.
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In certain sectors, such as IT, entry-level salaries are high and talent scarce. “It’s hard for start-ups to attract real quality, whether it’s tech skills or a really great sales person. It can be hard to get a high-calibre person at a price they can afford,” said Curley.
In those cases, offering shares remains a valuable tool. “You have to build a team. It’s impossible to make significant profit as a one-person operation,” she said. “So outsource as many functions as you can, such as book keeping or a virtual assistant to answer your calls, and concentrate on adding as much value to the business as possible with your hires.”
A JobBridge internship can be a good solution. “It’s like a six-month trial before having to commit,” said Curley. “Very often the business owner ends up wondering how they ever managed without that person and hiring them.” The government’s JobsPlus scheme, which provides grants of up to €10,000 when recruitment takes someone off the Live Register, is also worth exploring.
A start-up can offer flexible working arrangements, which can be very attractive, said Curley. “Maybe you don’t need someone to work full-time in an office, but can manage with someone working part time, possibly from home,” she added. “There is a huge resource out there in terms of highly qualified and experienced people, often women, who are at home and would love the chance to work mornings.
“You can find people with 20 years of experience for whom the long hours of corporate life or perhaps the travel, no longer suit. It’s better to have someone like that working for you part-time than someone with less experience full-time.”
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Many of the growing number of entrepreneurship graduates see the advantage of working with an existing entrepreneur. “It will give them a 360-degree view of what’s involved in making money and these are people who, down the line, want to go and do that for themselves,” said Curley.
Signing up to host college work placements or the EU’s Erasmus for Young Entrepreneurs programme, where you can gain a graduate with particular skills from across Europe for up to six months, are worth exploring, she added.
Another way to build a team on a budget is to hire board members. Many qualified non-executive directors on the Boardroom Centre panel want to work with start-ups. “These people love business and the excitement of starting and growing a business,” said the centre’s Thora Mackey. “They are realistic, they know not every business is going to be the next Google, they do it for the excitement of that stage.”
As well as experience and contacts, a good non-exec on your team can give you credibility. “It can provide you with invaluable validation when the start-up goes looking for investment or even when it comes to making key hires,” she said.
“For as little as €10,000 a year, you could get a team member who is as enthusiastic about your business as you, and has experience of success and where things have gone wrong,” said Mackey.
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Kevin Neary, who is on the panel at the Boardroom Centre, started his business Gamesworld with school friend Michael Finucane in 1994, selling a majority stake to US company GameStop in 2003. When he left in 2011, the company had 60 shops in Ireland and the UK and 500 staff. He believes start-ups should seek a mentor via local enterprise offices and Enterprise Ireland, even if they can’t afford key hires or an experienced board member.
“Everything changed for us when we were introduced to (the late) David Manley,” said Neary. “Even though we were already two or three years in, he helped us define our vision and mission.”