Why only people matter?

Couple of years ago I was in a startup event, following a panel discussion by experienced investors from Silicon Valley. They said something, that have been on my thoughts ever since. They said that they do not invest to an idea. They only invest in the founder team. It would never come to your mind when watching startups doing their two minute pitches on stage, that the investors are actually focusing more on who is presenting than what is being presented. Their point was that a great team will come up with a great idea eventually and execute it successfully. Mediocre or weak team will fail even with a great idea. 

Having been involved with many startups I have experienced it in very concrete terms: it is only about the people. So many great initiatives have died due the personal chemistry, over-sized egos, conflicting values etc. I have learnt, that the best way to test who you should be committing to a business initiative with is to do a project together. Personal chemistry can feel great until it is put through a real test of deadlines, set-backs, conflicts and failing. Especially failing and problems, which are an integral part on the path towards success, test if a working relationship will last or not.

A successful serial entrepreneur once said to me, that wise people say that one should never start a business with your friends, but who else would you start it with. You will be as close with your founder team as you are with your spouse. Who you do business with is as important decision as who you marry. Or even more important. A messy divorce is still cleaner than a messy breakup process of the main shareholders.  It can kill any successful business, lead to a very complicated legal process and poison the environment for all of your co-workers.

I have learnt that if there starts to be issues with a person already in the beginning of the project, those issues will only escalate and get worse over the time. If you feel warning signals, listen to yourself carefully, and rather walk away. Finding the 100% right team is the ONLY success factor. 

The other thing the investors said was that they only invest to companies that have a product / technical person in the founder team. They never invest to startups with only so called business people as founders. Sounds harsh? You can always outsource the tech development, user freelancers or even hire some techies to do the product development.

With these options you end up in a situation where the core DNA of your company are in the hands of someone who is no where nearly dedicated or dependent on the success of it. The one who is the heart and soul behind the core DNA of your business has to be a co-founder. I totally get that. I think in some levels it applies to any kind of businesses, but is especially crucial in technology based startups. The CTO has to be in the same shit as the non-tech founders - meaning her/his life depends on the success of your joint initiative. 

As I am writing this, I think about all of this in the context of working for an enterprise. It all applies. It is all about the people.