How to structure a startup?

What are the key components of a solid startup structure?

In my opinion, the key is the idea, goal and vision of achieving the goal. Very often you can hear from the creators of the largest start-ups that they noticed a problem, knew that there were a lot of people around who were struggling with this problem and tried to find a good solution that would satisfy everyone. It is worth, as a first step, to honestly verify the potential of such an idea on the market. This is closely related to the second key element. Even before we start gathering a team and making a revolution, we need to answer the question about the business model - will people be willing to pay for my solution, and if so, how much and maybe they will copy this solution faster before I can sell it to them. Only after determining these elements is it worth assembling a team, preparing a PoC, thinking about financing, scalability and legal and financial conditions. It is also worth securing the idea properly from the beginning so that the work does not go to waste. ~ Izabella Krzemińska

It is important to remember that the primary goal of a startup is to confirm at a low cost of time and money whether there is market demand for its product or service. In the early stages, where the search for product market fit is most intense, it is best to have as complementary a team as possible. The co-founders should be able to produce an MVP or PoC with their own efforts and start making sales or at least verifying market hypotheses. A solid startup structure should support this goal. Depending on the situation and stage, it is necessary to establish an official company, distribute shares among cofounders, create plans for product development, and get first clients or external funding. ~ ?ukasz Wi?niewski

The key components of a solid startup structure, as highlighted by experts Izabella Krzemińska and ?ukasz Wi?niewski, revolve around having a clear problem-solving idea and efficiently validating it in the market. Izabella emphasizes the importance of a well-defined idea, clear goals, and a vision for addressing a real problem, while ?ukasz stresses the need for a complementary team capable of validating market hypotheses. A successful startup structure should balance a well-defined vision with adaptable, cost-effective execution, evolving from initial experimentation to a more formalized structure as the business grows.

How can founders determine the optimal organizational structure for their startup?

It's always worth seeing how others do it. And here is an important analytical note - let's look not only at successful startups but also at those that failed. Founders are usually small teams that should use the available help from companies/foundations supporting startups such as business incubators. Multidisciplinary teams are ideal where members complement each other well in terms of competencies. The size of the team depends on the complexity of the solution being built. It is worth remembering that in today's world, time is of the essence - it may be better to parallelize work in a larger team and introduce something to the market faster than to do something with a small outlay and risk that someone else will implement our vision faster. ~ Izabella Krzemińska

If the team already has experience in startup development, I would rely on transparent decision-making processes. Lots of team brainstorming and workshops. If the team members are organizing a startup for the first time I would recommend considering taking part in an incubation or accelerator program. Such programs often help to structure the startup and also lead to the first funding or client. In both cases, I recommend reviewing your decisions after some time and discussing them together with your core team. ~ ?ukasz Wi?niewski

Determining the optimal organizational structure for a startup involves a balance of learning from both success and failure, as pointed out by Izabella Krzemińska. Founders should explore how other startups have tackled their structures, making use of available support from incubators and embracing multidisciplinary teams for competent collaboration. The team's size should align with the complexity of the solution being developed, with a recognition that time is a critical factor in today's fast-paced world. Parallelizing work may be beneficial to enter the market swiftly. Additionally, as ?ukasz Wi?niewski recommends, transparent decision-making processes, frequent brainstorming, and participation in incubation or accelerator programs can aid in structuring the startup, especially for first-time founders. Regular reviews and discussions with the core team are vital for ensuring that the chosen structure remains effective and adaptable as the startup evolves.

What strategies can founders employ to attract and retain top talent when structuring their team?

We would first have to start with the definition of what talent is. If the vision is attractive, sometimes attracting someone is easier than keeping them. This maintenance seems to be quite a big problem. Depending on what is planned to be built within the PoC, I would think about who exactly I need. Talent does not equal talent. R&D talent whose basic advantages are flexibility, T-shape competences and an open research mind will not work in production and fast delivery. And vice versa, the master and production talent will not be able to sit down at a blank page and come up with something from scratch. It would be nice to be able to look for people for whom participation in an interesting project is motivating and will accept the deferred reward of future profits. Last but not least, let's not overdo it with PR when recruiting - people have the right to make decisions that are good for them based on the truth. They are less likely to withdraw from these decisions. ~ Izabella Krzemińska

I have never had a problem with finding team members, so I can share my experience with domain specialists. Few people know that it is relatively easy to attract specialists from leading technology companies or even insiders from the customer segment.? There are plenty of people on the market who spend 15-20 years in one company or the same industry. They usually achieved a lot. They have great domain knowledge and network. Sometimes they are a bit boarded with what they do right now and that is your chance for cooperation. Changing job is risky for them but working part-time for a startup is not and it could be quite exciting. The main rule is to don't waste the time of such contributors. They are also more willing to accept equity as pay than cash.? Look for such contacts in your network. Alternatively, consider industry conferences or Linkedin. ~ ?ukasz Wi?niewski

Attracting and retaining top talent for a startup team involves a nuanced approach, as advised by both Izabella Krzemińska and ?ukasz Wi?niewski. Izabella Krzemińska emphasizes the importance of aligning the specific talents sought with the project's needs, acknowledging that not all talents are created equal and tailoring recruitment strategies accordingly. It's also crucial to be transparent in recruiting, avoiding excessive PR and allowing candidates to make informed decisions. ?ukasz Wi?niewski adds to this by highlighting the potential of domain specialists who, despite long tenures in established industries, can bring invaluable knowledge and networks to a startup. These specialists are more open to equity-based compensation and can be tapped into through personal networks, industry conferences, and platforms like LinkedIn. The key takeaway is that attracting and retaining top talent necessitates a tailored, strategic, and mutually beneficial approach that respects the motivations and unique value each team member brings.

What common pitfalls should founders be aware of when structuring their startup, and how can they avoid them?

There are many pitfalls, ranging from emerging differences in vision and goal, which leads to conflicts in the team, through incorrect understanding of the market situation, which affects the decisions made, various perturbations in the team, or expecting too much profit too quickly. From my experience, I can say that creators are too attached to their ideas, too inflexible, and deaf to feedback from the market from customers and colleagues. But the goal is not to create something that meets the creator's ambitions, but something that customers expect and need.? As a creator, it is also good to limit yourself with the "good enough" rule or Raymond Loewy's well-known rule for the design of modern things: MAYA "most advanced, yet acceptable" - which balances the need of the creator-innovator with the customer's need and what he can accept. Too often we forget about why we do what we do. ~ Izabella Krzemińska

Definitely one of the main challenges is the allocation of equity between founders or contributors. Fixed and upfront division is very risky. We cannot predict the future, including the needs of our startup (types of contributions), available time and motivation of particular team members, etc. The wrong allocation of equity leads to a decrease in motivation and even conflicts. I strongly recommend everyone to consider dynamic equity allocation methodologies such as Slicing Pie https://slicingpie.com/ . ~ ?ukasz Wi?niewski

Structuring a startup comes with several potential pitfalls, as noted by Izabella Krzemińska and ?ukasz Wi?niewski. Krzemińska highlights the dangers of founder attachment to their ideas, leading to inflexibility and a disregard for market feedback. The fundamental goal should be to meet customer needs rather than personal ambitions, underscoring the importance of adaptability. Izabella Krzemińska's reference to the "good enough" principle and the MAYA concept emphasizes the balance between innovation and customer acceptance. ?ukasz Wi?niewski points out the critical challenge of equity allocation, cautioning against fixed and upfront divisions. In a dynamic and unpredictable startup environment, static equity allocation can lead to decreased motivation and conflicts. He suggests utilizing dynamic equity allocation methods like Slicing Pie to fairly distribute equity based on changing contributions and circumstances. These insights stress the significance of adaptability, open-mindedness, and fairness when structuring a startup to avoid common pitfalls that can hinder its success.

In Conclusion

Structuring a startup is a multifaceted endeavor, and our expert insights provide a comprehensive guide for founders seeking to navigate this challenging terrain. The key components of a solid startup structure emphasize the significance of a well-defined idea, a clear vision, and market validation, as highlighted by Izabella Krzemińska. ?ukasz Wi?niewski reinforces the importance of a complementary team and adjusting the organizational structure to support the primary goal of confirming market demand. Furthermore, attracting and retaining top talent is a crucial aspect, as Izabella underscores the need for a tailored approach that aligns with the project's requirements and respects the motivations of potential team members. ?ukasz offers a unique perspective, advocating for the recruitment of domain specialists with industry experience. When it comes to potential pitfalls, our experts provide invaluable guidance. Izabella warns against founder inflexibility, urging a focus on customer needs and adapting to market feedback, and advocates for the "good enough" principle. ?ukasz emphasizes the importance of dynamic equity allocation to avoid conflicts and maintain motivation within the team. In essence, structuring a startup demands a delicate balance of vision, adaptability, and strategic decision-making to navigate these challenges successfully. By incorporating these insights, founders can pave the way for a robust and sustainable startup structure that has the potential to thrive in today's dynamic business landscape.

Our appreciation to the two experts for graciously sharing their expertise and insights:

Izabella Krzemińska, Ph.D. - An R&D expert with extensive experience in developing customer knowledge and establishing data-driven services is actively involved in projects at Orange Labs. These projects aim to devise innovative services that dynamically adjust to user requirements by leveraging concepts, algorithms, and models. These tools enable AI systems to modify their operational priorities, service interfaces, and options according to user preferences. The current primary research focus revolves around investigating personality and temperament's impact on individuals' daily interactions with emerging technologies.

?ukasz Wi?niewski - Product Owner of the PKO Bank Polski blockchain team. Experience in both running his own startup projects and working with startups on behalf of corporations.

Micha? W. - I’m Business Development Manager at Degen House, I’m leveraging my visionary leadership and expertise in business strategy to drive the company's growth. With a keen eye for innovation and a team of experts, shape Degen House's trajectory as a premier full-lifecycle software development house, delivering cutting-edge solutions and exceptional digital experiences.