Gordon and Llura Gund Family Professor of Entrepreneurship; Professor of Strategy
So you want to be an entrepreneur.
But when the time comes to start your company, will you be ready? Will you have found a team you can trust to bring your vision to market?
Nicole Staple, a 2012 graduate of the Kellogg School, is cofounder of Brideside, a Chicago-based startup where bridal parties can order dresses online, while still benefiting from high-touch, personalized services such as style consulting.
Staple and Benjamin Jones, a professor of strategy at the Kellogg School, discuss what the next generation of entrepreneurs should consider when deciding whether the time is right to begin their journey—and whom they might want to accompany them on the ride. Their discussion is edited for length and clarity.
Kellogg Insight: The entrepreneurship experience varies drastically from one industry, business model, company, and founder to another. It seems like one of the best ways for future entrepreneurs to set themselves up for success is to decide what type of entrepreneurship best suits them. Nicole, has this been your experience? What kind of an entrepreneur are you?
Nicole Staple: I would consider myself more of an innovator than an inventor. It’s not necessarily like I’ve always come up with the best ideas. The little things that I did as a kid, the little organizations I started, these were always based on innovating and hustling around something that wasn’t necessarily hyper inventive, but something that I thought could be better.
That was one of the reasons that it made sense for me to join forces with my cofounder, Sonali Lamba, who came up with the original concept, rather than coming up with something on my own earlier on.
Benjamin Jones: This is a very interesting dichotomy. We often think about the scientist or the engineer inventor, someone with a lot of technical knowledge.
One of my favorite products in the world right now is the invisible bike helmet called Hövding. It’s an amazing product; it’s an airbag for your head. It has huge market potential globally, but the two founders are technical-knowledge people. Neither of them had a lot of market knowledge, and they basically had to give away the company: They took a lot of venture capital, and by the time that the product was really working and looked like it had a market, their own equity shares were very small. They were in fact thrown out by the board.
When it comes to marketplace innovation, you don’t necessarily need technical knowledge yourself. You need to understand where there’s a problem to be solved for some kind of customer, an opportunity to find new value or more value in a particular vertical or industry—and to iterate solutions against it in an effective way.
Staple: With Brideside, I got very excited by not only the size of the market, but also the economics of our specific market.
The average woman and man get married, let’s call it once, maybe now it’s twice. But they will participate in another wedding 4.5 more times. This idea that a wedding is a one-time purchase is inherently untrue when you are catering to all of those customers. In that sense, we always think of the growth of our company in two ways: new customers that we’re acquiring, and the viral coefficient that comes with all of those other people buying from you.
Insight: So you’ve found your niche. What next?
Staple: Sonali and I had to make the decision about whether this was a company that needed both of us off the bat.
We were actually very good friends before I even considered jumping on board with the concept that she was developing. It became very clear as we started to work together that we brought very different things to the table. I have a background in finance and venture capital, and she was incredibly passionate and serious about wanting this company. The more we started working together, the more we realized we had a lot going for us. We played off each other really well in public presentations, we had a great creative process, we could spend late nights together and not get sick of each other.
Finally, we had to make the serious decision: Are we going for this? That’s when a lot of discussions came up around leadership goals. She had the original concept, but we had to talk about how to become true partners, because a concept is only as good as the execution. As when you’re talking about getting married, these are discussions that you might not be accustomed to having.
“We had to make the serious decision: Are we going for this?” -Nicole Staple
Jones: It’s crucial to have a relationship with your cofounder where you can go in thinking about that long game, and how well you’re set up for what is a marathon.
A startup is extremely stressful. It’s not a good day every day, and having founder frictions can really be devastating. They might not only damage your ability to go forward together, but can also set the tone and the culture of the company. Having a long time before launch to get to know each other is very important.
Staple: That’s an important point about your cofounder relationship setting the tone for the culture. People read your interactions. Your employees can sense if there’s tension, and your leadership team can sense it, and it’s very important to squash any perception of animosity. If there is animosity, face it head on, because it can be dangerous for retention and overall morale.
Jones: Yes, it’s often thought that issues between the founders can be listed as the number one reason startups fail.
So when you lock in a cofounder, and you give them equity and control, you need more than just the knowledge that you have complimentary skills. You are in this together, and either of you can defeat the company if things get bad, so you need to have a good relationship, trust, a common vision, and compatible styles at some level to succeed.
And remember, you don’t always need a cofounder to fill in the skills that you need to succeed. You can hire a team.
Insight: Any advice for doing this well?
Staple: Finding the right people is by far the hardest thing that we face. If you are serious about launching a company and taking on a significant financial and personal risk, it’s important to take your time.
The best employees we’ve ever hired at senior level are ones we built a relationship with over time. Give yourself a timeframe to get to certain growth goals or to work on certain projects together free from a long-term contractual obligation. This also serves to test their commitment to the mission and the vision. We have to be confident that the right people are going to be as obsessed with building a successful company as we are.
Even when we hire new people on our sales team, we have this little trial period before they’re eligible for their options package, and before they’re considered a full-time style consultant. Even at that more junior level, we have committed to this idea of “dating before you marry.”
Insight: Is there anything else that future entrepreneurs can do to put themselves in the path of success, perhaps before they even know what kind of a company they want to start?
Jones: Consider how well placed you are to see a great opportunity. This process tends to look different for B2C ideas vs. B2B ideas.
Many people have B2C ideas because they understand the final customer as a person or a household who’s trying to solve something. For B2B ideas, it often takes being in the industry for a while before you are ready. You see the supply chain, you see what’s not working, you understand the regulatory environment, you understand the kinds of human capital that are being deployed, and you see where those new, market-value-adding opportunities are.
In these cases, just be in an industry that you really are excited about, where your passion is, and wait for that really great idea. All the while, you should be developing your relationships within the industry and finding the people who will ultimately mentor you, work with you, cofound with you. That way you are ready to go when that good idea comes. You’ll be able to iterate reasonable solutions against that idea and assemble the resources you need—people, networks, financing—to attack it successfully.