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High-performing startups often have strong founding teams that include business-minded and technical specialists. The mythical founder who does all this is rare for a reason. The skill set that makes someone a top programmer or scientist is not the same skill set needed to lift capital and coordinate business operations.
The best partnerships pave the way for innovation and success. But partnerships can fail if business guarantees exceed technical reality. Think of Theranos, the fraudulent blood testing startup whose claims to the public and investors never matched the product’s actual capabilities.
As the founder and director of the department Center for Innovation and Entrepreneurship in Health Kerry Murphy Healey at Babson College, I often assist health care experts looking for business partners to bring latest ideas to market. Research I conducted with Babson colleagues Candida Brush and Alia Crocker suggests that cross-functional teams are most certainly to have the knowledge required for a successful enterprise.
Here are three strategies for building and scaling successful partnerships and companies.
Find the right person by setting clear expectations
Innovators seeking to bring a product to market and business professionals looking for the next startup don’t all the time have the same goals. When you meet a potential co-founder, be honest about your economic and mission motivations and ask them to do the same. Check if you are on the same timeline. How fast do each of you should move? If one person desires to enter the market and the other desires to decelerate, you’ll run into serious problems.
Make sure you share the same ethical approach to not cutting corners to achieve the next milestone, and do not forget to debate roles. For example, in healthcare startups, some scientists prefer to be silent partners somewhat than a significant a part of the company. So ask your potential co-founder: How involved do you should be with the company?
Partnerships require compatibility, at the same time as they flourish, because each person brings different strengths to the relationship. Don’t feel pressured to quiet down immediately. If a potential partner does not share your expectations, keep looking. By getting on the field early, you’ll be able to protect yourself and your team from disappointment and financial loss in the future.
You have options. Co-founder of matching platforms comparable to Y Combinator, Co-founders’ laboratory and others offer ways to attach. There are also specialized matching programs for specific industries. massVX, founded by Vinit Nijhawan, serial entrepreneur and CEO of MassVentures, connects physicians and other scientific experts with entrepreneurs who have experience raising capital and running a business.
Create a common language
Business-oriented entrepreneurs should research the field they are researching before trying out partners. You needn’t have as much knowledge about the innovation itself as a technical expert; that is why you are joining forces. However, you need to know the field well enough to debate its potential. You cannot set your small business up for success if you do not understand what your product does and why it’s higher than existing solutions.
For example, if you are entering the healthcare industry, you’ll be able to attend relevant medical conferences and follow scientific discoveries. If you are breaking into the gaming industry, you’ll be able to attend gaming events, read industry reports, and take heed to leading podcasts. In 2024, every technical field has a big selection of options available to learn more.
At the same time, you’ll be wanting to search out a technical partner who is open to understanding the business side. Before entering into a partnership, you need to provide a basic explanation of your projected revenue model, customer base, and market size. Are you a B2B company with several large clients? Or possibly a B2C organization that relies on individual consumer buy-in?
Once you discover an expert who speaks your language, proceed the conversation throughout the partnership. Set aside time for regular product development updates. Genuine entrepreneur curiosity makes tech experts feel understood and helps them do their jobs higher. When presenting to investors, you will not be tempted to gloss over the details – it’s a tactic which will eventually catch up with you.
Don’t let these meetings change into one-sided. You should keep your partner updated on business progress. Teams will only succeed when partners understand and leverage each other’s expertise in pursuit of a shared mission.
Develop common measures of success
You and your co-founder should monitor progress together. This initial agreement on expectations might be your north star when setting product and financial milestones.
As an entrepreneur, you are responsible for ensuring that your fundraising does not exceed your results. If you progress to Series B and C and don’t follow product development, eventually this neglect will come to light. For example, the 12 months 2022 test led by researchers from the investment firm Rock Health and Johns Hopkins University found that 44% of digital health startups had no clinical trials or regulatory documents to rely on.
You must also help technical experts understand financial measures of success, comparable to revenue and customer acquisition rate. Sometimes an engineer or scientist may feel like an entrepreneur is pushing the schedule too fast. Listen to those concerns. If you disagree, explain how your approach contributes to your organization’s goals.
Profit and purpose can go hand in hand when entrepreneurs and technical experts are on the same side. It’s not all the time easy. Making these relationships a reality is an art. By setting expectations up front, communicating clearly, and working on common measures of success, your partnership will profit each you and your organization.