Business Growth Strategies: What About Your Management Team?
October 26, 2010
Over the last couple of months I discussed my thoughts concerning the important areas of focus for a founder/CEO:
- CEO Leadership
- CEO and the Importance of a Repeatable Business Model
- CEO and the importance of an Economic Model
- CEO and Operational Execution: Segmentation and Planning for the Long Term
This week I wanted to spend some time talking about the importance of building out the management team for an expansion stage software company. As a Boston-based venture capital firm that invests growth capital in software companies, we discuss this topic constantly with founders and CEOs.
Every company in the portfolio faces this challenge, even to this day. In the early stages when you are still building a product, discovering your market segment and determining your market distribution model, you generally require only a small team and everyone wears multiple hats.
However, growth is required once you approach the expansion stage and your product is ready to sell. By this time you most likely found a market segment in which to sell the product in a repeatable manner through a distribution model and you are generating revenues and growth.
This is the time you need to scale the business, whether you are looking to raise growth equity or continuing to fund the company through cash flow. You need to tackle the challenge of building out a management team. People are the only strategic asset you possess (You can read more on my thoughts on this topic here) today and in the future.
It is time for you to bring current team together and promote honest and realistic discussions about the management team’s strengths and weaknesses and what key management team roles you need to add to the team. By adding to the management team you will improve your ability to scale and also improve the operational execution of the company. This leads to creating a sustainable competitive advantage and increases the odds of your company crossing the chasm…
Think about every successful software company on the market… LinkedIn, Google, Oracle, Facebook, Microsoft, etc. Their common thread includes great management teams that can hire great people who allowed the companies to scale rapidly and outperform the competition in their chosen market segments
Now is the time to think about your management teams and your next key hires for 2011.