The document discusses the importance of high performance teams for startup success. It notes that team diversity and open communication are important, as is aligning the team around key initiatives and tracking progress. The document also discusses challenges such as balancing formal policies with flexibility as a startup grows, and managing investor influence on technical teams. It emphasizes the need for open communication, aligning the team around goals, planning for challenges, and focusing on delivering key goals to foster a high performance culture.

1. Follow or Tweet: #ent101

2. Human Capital: the importance of
high performance teams to start-up success.

3. Outline
 Context
 Team diversity & dynamics
 On hiring
 Culture
 Communication style
 Compensation / incentive programs
 Advisory Boards
 Challenges, closing

4. Context: my background
 U of Waterloo, Chartered Accountant, Queens U
& UWO Executive Development
 20+ years in tech companies
 Co-founded DCI, grew to 60 staff then RTO on TSE
 Country manager HUBER+SUHNER
 Swiss multi-national, “blue chip”
 Team of 125 within 2,300 globally
 CEO BTI Systems to 2008
 Raised ~$60M VC over 4 rounds
 From 12 to 225 employees
 Revenue from $0 to $40M
 Currently EiR MaRS, freelance consulting, and
equity partner in e-Security professional
services firm TRM Technologies

5. Context
my typical playing field:
 A (very) technical product
 A technical sales process
 A long, complex, B2B sales cycle
 High growth market dynamics
 Very much a David & Goliath landscape

6. High Performance teams...
 Communicate openly, with diversity of opinion
 Align on 3 or 4 top initiatives and track them
 Plan as a group: short & long term & with plan “B”s
(and have resiliency - High AQ = Adversity Quotient)
 Are accountable to deliver

7. Multi-functional teams…
Software engineers
Product Management
Hardware engineers
Marketing
HR Sales
Quality
Operations
OR
Manufacturing
Finance
Administration
Investors Customer Service
Management
Directors

8. Venus & Mars
Software
+ Sales & Marketing
Engineers
+
Research
= ???

9. Motivation & drive:
different strokes for different folks
• Peer recognition
• Papers published, patent • “coin operated”
applications • “show me the money”
• Speaking at industry forums
• Technical challenge

10. But wait a minute:
we’re not that different
1. Everyone needs recognition - the “feeling” that you are important,
contributing to the success of the business, that your efforts are respected
and appreciated by fellow employees
 On budget / On time
 Cracking a new customer
 Customer testimonials – helping solve real problems
2. Technical teams want to work on a successful products.
Sales teams want to sell winning products.
The common metric is real customers /market share

11. Fostering teamwork
 Trade notes
• Technical teams are starved for customer feedback
• Sales teams are starved to technical innovation / uniqueness
 Push decisions to where the expertise resides
 The key linkage between Development, Operations and Sales is
Product marketing / product line management
 On occasion…take a ‘software geek’ to a customer, and bring a
‘sales puke’ into the lab

12. On hiring
 Bring in PLM, marketing / sales, & HR early…
 Have a hiring plan – force rank key hire timing.
 Hire the best you can – have choices – don’t compromise or settle
 Attitude over Academic credentials
 Be careful with big company experience (no job too small attitude)
 Use all the “free tools you can, especially
 Director and investor referrals are great but…

13. On hiring
 Refer to the March 24th EN101 “HR for Entrepreneurs”
 Do employment agreements right and from the start
 Compensation plans
 Termination & Severance
 IP protection that survives employment term
 Caution re structure - when choosing consulting vs.
temporary employment vs. permanent employment – this
can set precedents downstream that are difficult to undo.

14. Culture
Every company has a culture, every company has politics
 Perception is reality
 Work with it
My observations:
1. Culture changes with company lifecycle:
• The $1M, 5M, 10M, 25M, 50M barriers
2. In Canada, we’re trés multinational: use it to your advantage
3. As the leader: be candid
• Candid = Integrity
• A culture of candour is a source of sustainable competitive advantage
4. Celebrate wins, debrief setbacks, encourage mistakes (but not repeat
mistakes)

15. Communication style
 As CEO - Be yourself, know your biases
 Be OPEN, honest, straightforward
 Have the tough conversation
 Stop management “happy talk”
 Soft on the people, HARD on the problem
 Be inclusive: tie in the remote teams
 Set 3, clear company goals & repeat them
 Share the numbers: good & bad
 Regular informal & formal updates
 Have fun!!

16. Compensation & Incentives
 Fair, transparent and equitable
• People talk, especially engineers
 Salaries (the “start-up” factor)
• You have to be competitive – but not the highest
• Sometimes you want to pay a premium for “A+” players
• Test candidates with “we like you but simply can’t afford you…”
• It’s the “rich experience and reward that trump pure $$$ - that is how you
compete with the big companies…

17. Compensation & Incentives
 Company-wide incentive plan
• 10% “at plan” , 20% stretch
• Metrics must be aggressive, but realistic, and simple enough
• Combination of financial / market / product milestones
• Always drive home the capital efficiency message (Cash Flow Positive…)
 Stock Options (ESOP)
• A key tool, but don’t oversell them
 “Fun” and other rewards work
• Create a friendly competition / bragging rights
• Do not require big bags of $$$
• Examples: IP², a goofy award, employee referral bonus

18. Advisory Boards
 Very helpful to young companies – but more informal, without
governance and director liability responsibilities
 Try to complement the in-house expertise across broad functional
areas (technology, sales & marketing, finance)
 Pedigree is great, but access to the advisor and willingness to help
is equally important
 Can use members formally and on ad hoc basis
 Compensate typically with options or per diems
 I’ve used 1 yr renewable terms, options granted annually with
immediate vesting
 Make it enjoyable for all - dinners or special events…

19. Tech team challenges
1. The Investor / VC influence
• The same vested interest or ??
• An exit and minimum 20% IRR is natural
2. As the company grows up…
• Start-up excuses go away
• Employment / HR expectations expand
• Balancing formal (e.g. employee handbook) with
informal (“just do it”) gets harder
• Speed and flexibility diminish
• Management teams hit glass ceilings

20. Closing comments:
high performance teams for success
1. COMMUNICATE
 Set a tone that is open, based on mutual respect, and interactive
2. ALIGN
 Don’t all drink the Kool-Aid™: get all the customer / market touch you can
 Structure rewards & incentives to reinforce the behaviour & culture you are looking for
3. PLAN
 A high AQ team will handle the inevitable speed bumps
4. DELIVER
 If individuals and team FOCUS on the delivery of KEY goals it will automatically
generate a performance culture

21. Lance Laking
Entrepreneur-in-Residence,
Advisory Services, Venture Group
MaRS Discovery District
T (613)797-9033
E llaking@marsdd.com
W www.marsdd.com
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