If you know a cool bunch of really smart and talented people you may be tempted to say, ‘We could start an awesome company together and take over the world.’ And in some cases you can. However this post is a word of warning.

Problems are funny things. They rarely show their whole selves that the start. They are more like an iceberg and you say, ‘See it’s not that big, there is only a little bit pointing out of the ocean.’ Meanwhile concealed below it is an enormous chunk of ice that you only find out about when you try to ram it with your ship. Similarly when you jump into a problem to provide a solution there is a lot more going on than you understand. Now this is not a bad thing, it makes the solution much more fun and interesting.

So when you start with a team and decide to work your way backwards into a problem a couple of things can happen. First if the team comes from a specific industry vertical or a vertical within a vertical their focus on the problem maybe highly skewed by there experience to a small subset of the market. At one level they can build a good product that targets a small industry. It might even be profitable. However it can be severly handicapped in terms of expansion. Why? Because all the investments to date will have been to target a small market segment with no real plan for expanding beyond where the product started. In some cases this might be fine. But what if you big neighbor text door, Mr. Tech giant says look at that. How short sighted of them to only target that industry segment. I want in on the action. Then one of two things can happen, Mr. Tech Giant says to you I will buy you and you come work for me. I will send down a business development gal to help you see your short sightedness. That story has a somewhat happy ending. The owners get bought out and make some money. The second thing that can happen is Mr. Tech Giant launches the service himself. He may have a hard time attacking your industry if you do a good job but most of the rest of the market may go to him. (I chose Mr. Tech Giant since I have a technology background and I am doing a tech startup but in other industries he may take the form of another well funded startup, a conglomerate, or just another company looking to extend its reach.)

So what are you to do? So eventually you will find a problem. It may be obvious, it might not be. However there will be a definite problem and market opportunity. So then you say what will a solution look like? At the beginning you may have a very clear idea or you may not. In either case chances are that what you end up with will not look like what you originally envisioned. In order to move forward you will need some sort of a team. For a small consumer facing web site you may just need a couple of developers who can hack something together. For many things however you will need to assemble a team, at least a small one, of people with skills and experience that you do not have. This is especially true if you are young, like me. Before assembling the team you need to look at the problem and say what is it going to take to overcome this problem? Do I need someone to bring in advertisers or do I need someone with experience forging partnerships in a specific industry. You should not feel pressed to fill all the positions at once. If you have a list of who you need when you find a good person you will know that you have a role for them. In any case people should fit in to the team to bring something that will help the company be successful.

So in closing build a team around a problem, not a problem around a team.

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