In today's article, we will analyze what are the bases for having a good entrepreneurial team and having a good working dynamic in a startup.

Author: Patricio Hunt

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In academic terms, there are several studies that have established the existence of a correlation between the characteristics of the entrepreneurial team and the performance of startups. To begin with, startups are rarely the product of a “single-entrepreneur” but are more often set up by a team of entrepreneurs (Stef-fens, Terjeses, & Davidsson, 2012). A meta-study on this type of team and the performance of startups developed by several researchers from the universities of Tennessee in Knoxville, the University of Bern in Switzerland and the University of North Carolina-Charlotte, found a strong correlation between the sum of the skills and competencies of the entrepreneurial team and the performance of the startups, followed by the number of people in the team and finally the heterogeneity of the skills and competencies provided by all of them.

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A previous study (Elisabeth J. Teal, Charles W. Hofer, 2001), also found an important correlation between the past experience of working together of the entrepreneurial team and the performance of startups.

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So far what academic research says. When investors are asked, the answers are more diffuse... In a study by the New Entrepreneurs Foundation (NEF, London), the investors interviewed stated that, when it comes to the characteristics of the entrepreneurial team, they tend to focus mainly on the following:

• The energy given off by individuals
• The team's enthusiasm for the business idea
• Interactions between team members and whether they work well together
• The founder's drive and vision
• How the equipment is complemented
• The ability to work under pressure and in difficult times.

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As can be seen, investors take into account the complementarity of the team and if they work well together, which could in some way indicate that they are looking for signs of past experience working together... And then they introduce some new elements that, although compatible with common sense, do not seem to have much support in scientific research.

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Therefore, if we look at what is scientifically proven to work, the results of these studies allow us to get a quick idea about the characteristics that a team of entrepreneurs must have to improve the chances of success of startups:

• To start being a “team” that is to say two or more entrepreneurs and as far as possible avoid launching a startup as a “single-entrepreneur”.
• Continuing with the numbers, small teams (2 people) or large teams (more than 6) are preferable. Teams of between 3 and 5 people showed worse performance than the two mentioned above.
• Has a moderate amount of experience working together;
• To add a significant amount of skills and competencies among the members of the team, the more heterogeneous the better;

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Of these characteristics, the first and second are easy to identify, and therefore, even if the solution is not easy, the diagnosis is simple. The third is one more input when it comes to correcting 1 and 2, certainly not simple since it acts as a powerful constraint in terms of resource selection. But the real problem is the fourth characteristic, since it is first a matter of identifying the team's skills and competencies and then studying how to complement them in the context of 1, 2 and 3. Therefore, the question we should ask ourselves, whether we are entrepreneurs or investors, is with what methodology can we determine the complementarity of skills and competencies in a team of entrepreneurs?

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To form balanced entrepreneurial teams, taking into account the abilities and competencies of the members, there are different methodologies. Two of the most effective are Myer-Briggs Type Indicator (MBTI) (Mayers, 1962) and DISC (Marston, 1928). Both assessment tools provide insight into personality and behavior. However, there are differences between them.

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The DISC methodology is an acronym for Dominance, Influence, Serenity and Consciousness and is a mix between personality and competencies. Each person has a unique combination of DISC, and, therefore, an entrepreneurial team will have a degree of dispersion in the 4 DISC dimensions that combine competencies related to each of the four behavioral styles (Fuel, Pardo-del-Val, & Revuelto-Taboada, 2021). In the following infographic, you can find the key competencies of each dimension of the DISC model:

A study on whether the ideal entrepreneurial team exists (Fuel, Pardo-del-Val, & Revuelto-Taboada, 2021) suggests that it is necessary to incorporate a high degree of Dominance at heterogeneous levels among team members and accompany it with founders who bring serenity to the team. It is also necessary to incorporate a medium and homogeneous level of Awareness to achieve good financial results in the initial years.

On the other hand, the Myers-Briggs methodology encompasses personality types into four binary categories:

- Introversion or Extraversion (How you focus your attention) - Sensation or Intuition (How you process information) - Thinking or feeling (how you make decisions) - Judging or perceiving (how you interact with the world)

After taking a test with more than 90 questions, the results place the individual in one of 16 clearly defined personality types labeled with a 4-letter code that corresponds to the person's preference in each of the 4 binary categories. The results are designed to help individuals understand themselves more fully.

In general, both methodologies provide tools for entrepreneurs and investors to identify the personality characteristics of a team of entrepreneurs. The MBTI is based on the fact that personality is fixed and is unlikely to change, while the DISC is more open to the possibility that different environments can bring out different personality traits of individuals.

Neither method is necessarily better than the other. But we have to keep in mind that the MBTI is more of an indicator of a person's internal thinking. The results are more intimate or personal. Instead, the DISC is designed to measure how a personality translates to external behavior. It is more precise and specific to the environment in which it is carried out, in this case, the business environment. Personally, after having used both, I prefer DISC as the most effective tool for this purpose.

Read more: Why is it always better to start as a team?