Quantitative analysis of start-up team composition, alignment, and mindset
Data-driven insights into teams nobody else can provide and answers for questions like:
- Can you trust your gut if you feel your team is misaligned
- Which personality types do founders have, and which ones team-up
- What are the most and least controversial topics
- What are the predominant opinions on topics like — under which conditions someone would leave their start-up
After many teams used Aligna to align their vision and many requests from VCs and accelerator programs considering insights and tips on which teams work best, I finally had a chance to look at the data to find some sound conclusions.
Most teams consist of 2 founders, but it is not always a visionary and a hacker, but rather seems like extroverts and introverts stay among themselves. Teams are least aligned when it comes to commitment and teamwork. The most critical questions are which additional sacrifices (e.g., cash, relocation) team members are willing to make, and when they would leave. Up to 60% of founders are in the game to build something value-adding from scratch. Only one quarter aims to build a unicorn. The desired outcome is financial independence. Not everybody wants a family-like atmosphere at work, and while unequal equity distribution is not a major issue, being the only one working and different business values definitely are. Founders were able to anticipate alignment issues in their team — this is why you should check it.
One of the main reasons why start-ups fail is misaligned cofounders. To prevent failure due to misalignment, it is necessary to create transparency about the cofounder’s opinions to take action and prevent blowups.
Aligna pragmatically helps structurally measure internal alignment along critical dimensions of the early-stage team. The information of each cofounder is acquired via an online questionnaire, and the scoring happens without additional effort afterward. The result is a team analysis that serves as a starting point for realignment and further discussions.
Questionnaire and data
The questionnaire is structured into five major categories: personality, motivation, time and money, commitment, and teamwork. The categories were defined based on interviews with various stakeholders in the start-up scene and academic research. The overall goal was to keep the number of questions as low as possible while maximizing pragmatic insights. None of the 27 questions are mandatory. We neither claim to be comprehensive nor fulfill high academic standards.
Since privacy is very important to us, the data for the analysis was anonymized in advance and did not contain any personal information.
How we measure alignment
In the scoring process, questions are interpreted with a predefined measurement of alignment, if two or more members answered it and skipped otherwise. The overall score of the analysis is calculated by weighting and factoring in each result. The score lies within the range [0,1], with 1 being fully aligned.
The questions are classified into the following types:
- Dichotomous (e.g. yes/no)
- Nominal categorical (no intrinsic ordering of answers)
- Ordinal categorical (distance between answers matters)
- Myers Briggs (gives information about the personality)
- Not rated (scoring does not make sense, but discussing does)
Most of the types require different scoring approaches and algorithms. Aligna considered a multitude of approaches and took a pioneering role by applying new algorithms in a structured team-building context.
One drawback is, that there is no information on the outcome of the start-ups, so beneficial factors for success cannot be identified, but we are already working on a solution to fix this.
Another is sample bias. Most start-ups in the dataset came through accelerator programs or coaches and are somehow aware of the pitfalls of team misalignment.
Some sources state that the perfect size of a start-up team is two — which seems to be reflected in the data. The team is then as lean as possible, having a huge amount of trust, and allowing to distribute the workload. Three and more allow for more diverse skillets and focused roles but also introduce more opportunities for friction and overhead.
Founder personality types and pairings
Every start-up needs a certain set of skills that needs to be covered by the team. Founders should therefore have a disparate set of character traits and skills. Aligna uses a bare minimum of questions to identify Myers-Briggs Identity Types (MBIT). Figure 4 shows the distribution of the top 10 personalities among the founders. The most common one is ESTJ, the so-called “Executive” according to 16personalities. Directly followed by ENTJ — the “commander” and ISTJ — the “logistician”.
Pairings of personality types in teams seem to be highly heterogenic. However, some of the more common combinations are INFJ (advocate) and ISFJ (defender), ESTJ (executive) and ENTJ (commander), and ESFJ (consul) and ENFJ (protagonist). This seems to contradict the old story of visionaries and hackers. As an overall pattern, it seems as if extroverts team up with extroverts and introverts with introverts.
Teams are least aligned when it comes to commitment. The most critical questions of all are which additional sacrifices (e.g. cash, relocation) members are willing to make, as well as under which condition they would leave. But there are minor discrepancies in the expected working hours.
The second worst category is teamwork, with questions about conflict resolution, company culture, and coping with stress.
A category with good as well as bad scores is motivation. There are few differences when it comes to whether the founders have a plan B, which comes as a surprise. Teams also share the same vision about what kind of company they want to build — sustainable or high growth, but discrepancies appear when it comes to the size of the company, how long they want to stay, and even more about the expected gains in a liquidity event. It is vital to pull in the same direction on these topics though.
When it comes to the more tangible issues, like working hours, income, and timeline — teams have often already discussed them and have a common vision.
Let’s have a look at the distribution of opinions within the individual questions to understand the real personal goals and wishes of the founders.
Up to 60% of founders are in the game to build something value-adding from scratch (Fig. 8). Most of them want to start big companies, rather than small “boutiques”. However, only about one quarter aims at the unicorn level (Fig. 9).
A vast majority is not in for the VC and exit case scenario, but to build something more sustainable that generates lasting revenue. Yet, most are willing to leave their post if there is someone more qualified at a later stage. Only a few aim for the fast exit.
Expectations regarding the profit in a liquidity event also do not appear excessive, with preference being given to acquiring financial independence or even less. However, there is a small group of people that want to build a unicorn 🦄 but are content with a sub-million returns.
About three-quarters of respondents do have a plan B. This topic can become a problem during hard times when plans are diverging.
Start-up characteristic family-like work culture only comes in second after result orientation and efficiency.
There must be serious reasons for leaving one’s own company. A vast majority of founders said different values in business are one of them. Keeping up high motivation while dealing with all the ups and downs can be taxing, being the only one working doesn’t help. 60% agree with this. Working in high-stake situations in close quarters with determined colleagues can cause tensions 💢. Over 50% would not tolerate personal conflicts becoming a burden.
Opinions are more favorable concerning the distribution of shares. Only 25% insist on equal distribution.
Gut feeling and founder self-assessment
Founders were asked how much they felt the team to be aligned. Yet, people stating that they have a clear vision in their team had a massive dispersion in their actual results. Those who estimate the alignment low received scores skewed towards the lower end and only a few good ones by surprise. This suggests that founders can already anticipate sub-par alignment.
What to do next?
You can use Aligna with your team for free here. If you like to support the mission, please share it with befriended start-ups 🙏.
PS: 🥳 We just launched a tool at GoodIP that helps start-ups navigate the legal jungle and to protect their business. Go check it out here.