Guest column

Here's what Houston startups need to keep in mind when building their teams

Teamwork can make the dream work, but lack of a solid team can be a startup's downfall. Pexels

The top two reasons for startup failure are no market need and running out of money, respectively. But the third reason for failure is not having the right team in place. Like market need, evaluating the management team is on virtually every venture capitalist's list of what they look for in their target investments and you need to get it right.

It is well known that new technologies have a limited window of opportunity to succeed and there are rarely second chances, whether choosing the right strategy, market, customers, partners, or raising rounds of financing. If a particular window is missed a chance to pivot may be available, but that typically requires a good, experienced and nimble team that is right for the overall opportunity.

Luck and timing are factors largely out of your control in a startup, but good-to-great teams are capable of dealing with fast changing conditions or lessons learned along the way.

There's not one "right team"

It is easy to say you need the right team, but the same team is not the right team for every startup. Any team needs some basic skills, and of course have the ability to deliver a solution to meet its customer's needs.

In addition to a diverse technical team, a startup needs different skill sets, including various business, professional and soft skills. It is obvious that software is different than medical devices, but within "software" there are a wide variety of skills needed from user interface to security and everything in between. Within medical devices, the variety ranges beyond technology from working with the FDA to medical reimbursement.

Similarities between standard business processes like customer billing, collections and capital asset management often do not vary much across some otherwise pretty diverse businesses. On top of that, the needs of the team change over time as startups progress from concept, to prototype development to launch and through growth phases.

Having experience with many different startups, I have had some recurring team members with whom I worked with again in my next venture. I have also experienced significant turnover of individuals and growth within individuals that where ready for a new challenge to keep them motivated. The right team varies from venture to venture.

Know your industry

One lesson is to have a few cornerstone roles in the organization. First learned in my consulting days, a talented team member might serve in a kind of cornerstone role where you know that job is "solved" and you will not have to worry about it. You then complement and build around him, adding more experience in a complementary role if the first individual has raw talent and enthusiasm. You would add young talent with plenty of room for growth around an experienced individual that has the ability to mentor those around them. No one way exists to create a good team, other than the best practice of mixing experience, talent and diversity in creative ways based on who based on availability.

However, patterns should be identified and assessed to complement customers when deep engagement is a key part of your model or with partners, distributors, channels, or other strategic parts of your extended business model. Some customers will accept less experienced staff; others will not. Some markets can be targeted successfully by inexperienced sales or customer service representatives, while others require field experience or at a minimum extensive targeted training.

Finding support

Beyond patterns, consider some other best practices that are appropriate for various markets; for example, the risk incurred by having an inexperienced FDA process lead in an FDA regulated product. Having little real experience with FDIC, SEC or similar relevant federal or state agencies creates a lot of risk in FinTech companies. In any startup, some areas can be easily contracted out while others need to be core internal strengths, even if developed over time.

That last word is key, the "time" component of startups. Early stages of a startup have parallels to my consulting days. It is a project that is managed like any other project, balancing the big three assets: resources, money and time. Any project is a balancing act of acquiring and managing those three assets, at least when you take out administrative details like payroll and the like. The next stage is more operational in nature, whether stabilizing operations or managing for growth, but it is common for a startup to have two or more CEOs between founding and exit as needs change.

Since VIC primarily is focused on university technology startups, the inventor is often a university researcher with decades of experience in the field of the invention. We follow a best practice of bringing in one of our senior team members as CEO, an experienced business savvy entrepreneur who complements the inventor well in those early technology de-risking phases.

We support those key team members with a shared service team to handle finance, accounting, legal, websites and more, outsourcing specific areas of expertise like intellectual property in a given technical area. We then fill out gaps with select hires. Over time, we work ourselves out of a job when the technology has progressed to a point that different skills are needed, such as handing off to a growth-stage CEO.

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James Y. Lancaster is the Texas branch manager for Arkansas-based VIC Technology Venture Development. Lancaster, who lives in College Station, oversees business there, in Dallas, and in Houston.

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Building Houston

 
 

This week's roundup of Houston innovators includes Thomas Vassiliades of BiVACOR, Katie Mehnert of ALLY Energy, and Don Whaley of OhmConnect Texas. Courtesy photos

Editor's note: In this week's roundup of Houston innovators to know — the first of this new year — I'm introducing you to three local innovators across industries — from health care innovation to energy — recently making headlines in Houston innovation.


Thomas Vassiliades, CEO of BiVACOR

BiVACOR named Thomas Vassiliades as CEO effective immediately. Photo courtesy of BiVACOR

Thomas Vassiliades has been named CEO of BiVACOR, and he replaces the company's founder, Daniel Timms, in the position. BiVACOR is on track to head toward human clinical trials and commercialization, and Vassiliades is tasked with leading the way.

Vassiliades has over 30 years of experience within the medical device industry as well as cardiothoracic surgery. He was most recently the general manager of the surgery and heart failure business at Abiomed and held several leadership roles at Medtronic. Dr. Vassiliades received his MD from the University of North Carolina, and his MBA was achieved with distinction at Emory University.

“I am excited and honored to join the BiVACOR team, working closely with Daniel and the entire team as we look forward to bringing this life-changing technology to the market,” says Dr. Vassiliades in the release. “Throughout my career, I’ve been guided by the goal of bringing innovative cardiovascular therapies to the market to improve patient care and outcomes – providing solutions for those that don’t have one. BiVACOR is uniquely well-positioned to provide long-term therapy for patients with severe biventricular heart failure.” Click here to read more.

Katie Mehnert, CEO and founder of ALLY Energy

Katie Mehnert joins the Houston Innovators Podcast to discuss the future of energy amid a pandemic, climate change, the Great Resignation, and more. Photo via Katie Mehnert

Katie Mehnert started ALLY Energy — originally founded as Pink Petro — to move forward DEI initiatives, and she says she started with building an audience first and foremost, but now the technology part of the platform has fallen into place too. Last summer, ALLY Energy acquired Clean Energy Social, which meant doubling its community while also onboarding new technology. On the episode, Mehnert reveals that this new website and platform is now up and running.

"We launched the integrated product a few weeks back," Mehnert says. "The whole goal was to move away from technology that wasn't serving us."

Now, moving into the new year, Mehnert is building the team the company needs. She says she hopes to grow ALLY from two employees to 10 by the end of the year and is looking for personnel within customer support, product developers, and sales and service. While ALLY is revenue generating, she also hopes to fundraise to further support scaling. Click here to read more.

Don Whaley, president at OhmConnect Texas

Texas is about a month away from the anniversary of Winter Storm Uri — would the state fair better if it saw a repeat in 2022? Photo courtesy

The state of Texas is about a month away from the one year anniversary of Winter Storm Uri — but is the state better prepared this winter season? Don Whaley, president at OhmConnect Texas, looked at where the state is now versus then in a guest column for InnovationMap.

"Governor Abbott has gone on record guaranteeing that the lights will stay on this winter, and I am inclined to agree. With the reinforcement of our fuel systems being mandated by the Railroad Commission, 2023 to 2025 should receive the same guarantee," he writes. "Beyond that, as the demand for electricity in Texas continues to grow, we will need to rely on the initiatives under consideration by the PUCT to attract investment and innovation in new, dispatchable generation and flexible demand solutions to ensure long-term stability in the ERCOT market.

Whaley has worked for over 40 years in the natural gas, electricity, and renewables industries, with specific experience in deregulated markets across the U.S. and Canada. He founded Direct Energy Texas and served as its president during the early years of deregulation. Click here to read more.

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