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When Single Minded Works and When it Doesn’t

May 2nd 2014

There is apparently plenty of evidence that teams perform better than an individual.  For example, the University of Illinois found that groups of size three, four, and five outperformed the best individuals and attributed this performance to the ability of people to work together to generate and adopt correct responses, reject erroneous responses, and effectively process information.  Ohio State compared individuals with two-person teams in game experiments. Teams consistently played more strategically than individuals, and this was most striking following changes in payoffs.  In other words, when circumstances change – and a startup may need to pivot - teams are better at dealing with it.

However, against this sort of data is the view that a focussed and driven individual can make much more progress than any sort of committee.  There are many examples of where inspirational, charismatic or obsessive leaders are the real drivers of success – Steve Jobs, Bill Gates, Larry Ellison and so on.  And this isn’t just confined to tech businesses.

Recent work at Harvard adds some light.  Their research consistently showed that teams underperform, despite all the extra resources they have.  That’s because problems with coordination and motivation typically chip away at the benefits of collaboration.  As a team gets bigger, the number of links that need to be managed among members goes up at an accelerating. It’s managing the links between members that gets teams into trouble.

For tech startups there’s now specific data.  . Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2, and they are 2.3x less likely to pivot (i.e. change direction and we know that one to three pivots is optimal).  Further, balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.  Clearly, teams can bring a wider range of skills to bear.  In terms of the team skills, business-heavy founding teams are 6.2x more likely to successfully scale than product-centric startups. 

So the summary seems to be that in the changing and challenging world of tech growth, a modest sized team is more likely to succeed, oversized teams are more likely to fail and the obsessive individual may be a long shot, but could be the star performer.  Plus ça change.

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