Team Deficiency Accounts for Startup Failure 33% of the Time

startup failureTeam deficiency accounts for startup failure almost 33% of the time, as reported by ChubbyBrain and Bruce Lynn. Although the original research includes 32 failed companies, it's important to be cautious given the likely possibility of sample bias.

From the research:

Failure post-mortems often lamented that “I wish we had a CTO from the start, or wished that the startup had “a founder that loved the business aspect of things”.  In some cases, the founding team wished they had more checks and balances.  As Nouncers founder stated, “This brings me back to the underlying problem I didn’t have a partner to balance me out and provide sanity checks for business and technology decisions made.”  Wesabe founder also stated that he was the sole and quite stubborn decision maker for much of the enterprises life, and therefore he can blame no one but himself for the failures of Wesabe. Team deficiencies were given as a reason for startup failure almost 1/3 of the time.

Clearly these team deficiencies stem from both skill sets and perhaps more subtly, personality differences. While the research mentions relationship disharmony in another section, it wouldn't be unreasonable to assume this also contributes to failures in this category too.

Startup Failure, Team Deficiency and Google

team-deficiency-google-search-resultsWhilst writing this post, it was striking that when googling "team deficiency" none of the top results, at the time of writing, deal directly with the topic. Given the time and money put into team related issues by businesses, founders, investors, consultants and researchers, this came as something of a surprise.

Whilst is it commonplace to speak in terms of mechanical, manufacturing, medical or construction related deficiency, there are precious few online articles dealing with team deficiency.  If teams are said to be deficient in something, then this raises a whole series of other interesting questions, not least of which is 'what is a team'?

The Mindset Behind Startup Failure and Team Deficiency

When thinking about what a team is, rather than reeling off a list of the usual suspects like goals, visions or skill sets, it's perhaps worth spending a moment to think about the mindset that comes up with the term 'team deficiency' in the first place.

As the research above comes from startups, it wouldn't be outlandish to assume that such a mindset is focussed on cause and effect outcomes, dealing with complexity, probabilities, high risks and high rewards and minimising failure.

Given that these factors are likely to play a meaningful role in the minds of startup founders, key employees and investors then this might not be a bad place to start from. This is perhaps even more important when considering the risks and rewards associated with startups and other high profile projects.

Combining a Startup Mindset and Team Deficiency

With the lack of articles on team deficiency on the one hand and the assumed mindset of those involved in startups on the other, the overlap between the two areas feels very embryonic. Perhaps what's missing is a working definition of a team that explicitly focusses on elements that are measurable and predictable when it comes to assessing team performance.

If such a definition were available, then determining exactly what a team is deficient in would then become a much simpler exercise. Until then, the search for a better understanding of what contributes to startup failure continues.

Image credit: guitargoa

This entry was posted in Venture Capital, Tools, Intangibles, Psychology, Teams, Relationships and tagged , , , , . Bookmark the permalink.

2 Responses to "Team Deficiency Accounts for Startup Failure 33% of the Time"

Leave a reply