Do you build a team and develop an idea from there, or develop an idea and then develop a team? This chapter begins by exploring the Zell Program team dynamics experience, which, by design, is built on Team First. It has its exceptions in the program, and obviously does not hold for alumni team formations. That alternative is explored in Idea First, Team as Needed, which is the norm for many second-time entrepreneurs. The chapter then explores what ultimately makes great teams work, regardless of ideas, which are shared values, in Same Same but Different. It continues with some team dynamics that are a product of marriage, sometimes personal and more often professional, in a Venture Partnership Is a Marriage; Sometimes Literally. Solo teams are discussed in Sole Souls. Finally, no matter the team formation, how teams are grown and the role of culture is explored in Culture Eats Strategy for Breakfast.
The venture creation process at Zell starts after a long application and screening process that commences with an information session on campus, includes several rounds of faculty and alumni interviews, and a 10-day boot camp of sorts (heralded by some IDF elite unit officers as more challenging than their own army boot camps), and ends when the class is formed about eight months later. While there have been some exceptions to this rule, generally, participants apply to the program with a venture idea as individuals.
Dror Ceder and Daniel Tal (Zell 7 – 2008) came as a team with their idea for Joongel, proudly showing their working website when we met ahead of the screening process.10 Later, this idea morphed into Wibiya. [See the Wibiya Case Study] The only ask on our end was that they come into the program open to the idea of adding an additional co-founder. Though the program is open to the idea, coming as a team is nevertheless rare.
Only after final screening is complete and a candidate is accepted to the program do they set about the painful process of choosing a team within the pool of available program participants (which is about 20 people who are concurrently setting out to do the same).
Team formation is a big part of the venture creation process at Zell. There seems to be a tendency, generally and certainly in the program by proxy, to create teams with people with the same skill set or similar backgrounds, and often, based on some kind of shared history. At Zell, the pool of possible teammates, as diverse as we try to curate it when choosing a cohort, is constrained by virtue of being an academic program open to students in their final year at IDC Herzliya, which itself is a private social sciences-focused university in Israel.
Even beyond the program and IDC constraints, this makes sense since the frameworks by which people meet and get to know each other are often school (where people share the same field of study, or come from the same neighborhood in the case of grade school through high school), work (where they are on the same team, likely in the same department of a certain industry), or the military (where they served in the same unit, i.e. the 8200 technology unit, an elite combat unit, or otherwise, that caters to particular profiles of people). The assumption behind shared history is that people behave the same way in different situations (i.e. the battlefield versus the running of a business startup). However, what may have worked incredibly well in a research unit, in combat, or in any other particular military experience, does not necessarily play out the same way in other contexts. In the Zell Program, many times students who were friends from school (Wibiya, Overwolf11, Wibbitz12, or Feex13) had similar army experience (Bizzabo14), or even had a shared experience in the Zell year in different teams (Rewire15) naturally connect to form teams.
The Zell Program has tried myriad means of helping facilitate optimal team formation without actually being involved in the formation. We view this as a platform to give program participants an opportunity to make a choice that they ultimately have to live with the consequences of. We don’t want to get involved or actually choose the teams because the program ethos is that of promoting leadership, responsibility, and accountability.
The program does provide the time and space for participants to interview each other and get to know each other. We also provide faculty guidance in team dynamics and team formation strategies led by Dr. Amir Kfir, and vision and values by Lorraine Tuffias.
We have tried different frameworks over the years. At first, teams were chosen in the course of, or right at the end of, the Summer Induction Program (SIP).16 We then tried to space it out and encouraged teams to work together for two to four weeks after SIP. In recent years, we instituted a program that follows SIP, where we create a space for participants to spend unstructured and structured workshop time to make this decision. The dynamics of the small data set and limited diversity invariably makes this one of the toughest parts of the program. Though the program keeps trying to hone the process from year to year and improve it, many participants carry the battle scars of team formation for years.
Some teams lead to successful ventures, but many break down and regroup in the course of the year. The program accepts this as a natural part of the constrained venture creation environment of the academic setting, and encourages participants to work with the team with whom they believe they can build a real business. The ‘November Crash,’ or sometime a few months into the semester, there is usually a reshuffling that starts with one team break up that creates a kind of domino effect. The second team regroupings often hold for the remainder of the year effectively, which seems to be a reflection of more thoughtful and mature team formation and the ticking clock of the program timeline.
Once a team is formed, the participants tend to choose an idea that was not one of their original ideas coming into the process. There are all kinds of explanations for this: a new team wants a new idea, the students spent considerable time validating ideas during the summer program and may have already nixed ideas they came with, ego, etc. Either way, at Zell, generally the team comes before the idea. But outside of the program and sometimes even within it, this is not always the case.17
As an example, Ron Gura (Zell 9 – 2010) came to the program all set to form a team and take the charted course of the Zell journey.18 But he had had an itch that he felt compelled to explore, and felt his team was not the right match for an idea introduced by his sister-in-law.19 He left his Zell team to pursue this idea, added two co-founders from outside the program who were childhood friends, and set off from there. The idea was consumer-facing and ‘scratched their own itch’ in a sense, but as is evident in the case study, it was driven more by naivety and a connection to the mission at hand than by anything else. [See The Gifts Project Case Study]
For repeat or second-time entrepreneurs, it's interesting to note that many go off on their own at least at first on the second try.20 For Yotam Cohen (Zell 9 – 2010), ideation for Daisy21 was a process he set off on at least initially, on his own after leaving Wibbitz, the venture he founded with Zohar Dayan.
Sometimes, ideas develop from the particular professional experience or passion of one of the founders. The founder then seeks out individuals that have skill sets or domain expertise required in order to move the idea forward. This makes sense logically. However, the reality of the ideation process and then the validation of the idea is that ideas tend to morph so drastically that the idea itself may require different talent, i.e. in technology (the AI specialist is less relevant if the venture idea shifted to blockchain), or domain expertise (the venture no longer needs a doctor, but instead needs an actuary, if the venture has veered from a medical application to an insurance idea).
For Zebra Medical,22 Eyal Gura (Zell 2 – 2003) knew he would eventually need domain expertise in the medical space. However, he did the leg work (including self-funding) ahead of building the team of industry experts by focusing instead on getting access to the valuable electronic medical records they would need, then bringing fellow Zell classmate Eyal Toledano (Zell 2 – 2003) to leave his MIT Media Lab position to join as CTO, and only after that bringing in the industry related third co-founder (another Zell-related connection introduced by a then Zell student to Eyal Gura, while he was teaching in the program).
This lends itself to the notion that founding teams should be created out of more than just skill set and domain expertise (both can be added or hired), and more out of trust and compatibility of values. From my experience with numerous teams, a good team will be able to adapt to changing ideas (and the roller coaster that is entrepreneurship) more as a function of the personalities and team dynamics between the founders than of the skills and expertise they bring to the team.
We try to instill this thinking from the get-go of team formation at Zell, and over the years have tailored the team formation process to focus on values and diversity of thinking over technical skills; but we spend even more time throughout the program focusing on effective communication once teams are formed.
1Item23 is a prime example of a confluence of opportunities that generated team formation with two very different personalities espousing very different work ethics. What held Noa Issler Segev (Zell 9 – 2010) and her co-founder together, as evident in the case study, was the ability to communicate directly and transparently, and focus on the core rather than the outer trappings. [Read more in the 1Item Case Study]
Alternatively, Bizzabo’s CEO, Eran Ben Shushan (Zell 9 – 2010), holds that the way to gauge co-founder fit is using the ‘beer test’; or how much of a match there is beyond the work environment when sitting down to have a beer at the end of the day. [Read more in the Bizzabo Case Study]
Another example of finding teammates, which has gained in popularity as the Zell Alumni Network grows, is tapping into the alumni base for co-founders.24 Or Benoz (Zell 11 – 2012) had an idea for digitizing and optimizing remittance payments. He did some initial validation, reached out to a classmate who was not on the same team with him during Zell, and offered Guy Kashtan (Zell 11 – 2012), who was at Microsoft at the time, the opportunity to join and form a team together.25
From my experience, teams that succeed and hold together share values and are aligned around the mission. This requires lots of open communication and introspective self-reflection. As Adi Eckhouse (Zell 5 –2006) of RealFace emphasizes, “The importance of choosing someone with different skills but similar values is of utmost importance. While sitting in a coffee shop working on business decks or algorithms, the relationship between two new co-founders can seem fine. But down the road when the two partners are negotiating with a company like Apple, that aligned value system makes all the difference.”
She notes in the RealFace Case Study, “One of the most important learnings I have is that the partner you choose, your co-founder, is not less important than your partner in life.” [See the Realface Case Study]
Sometimes, your business partner is truly ‘your partner in life’. That was the case with Liat Mordechay Hertanu (Zell 1 – 2002), who founded 24me with her husband, Gilad Hertanu.26 There are some investors who more than raise an eyebrow at this.27 But over the years, there is a growing body of research and understanding that this may not be a bad idea.28 I am not aware of many wife-and-husband duos, and certainly not of a data set that would lend itself to any hard conclusions. But I have spoken about it with an IDC graduate who did not end up joining the Zell Program for technical reasons, but who has kept in touch and often hosted our students on the U.S. study trip abroad, Oz Alon, who co-founded Honeybook29 with Naama Alon (and an additional co-founder, Dror Shimoni).30 He noted that they bring different skills and viewpoints, and have more of an incentive to share in each of their successes, which is truly a joint success. While I can imagine it would also bring some unique challenges, at least as far as Zell alumni founder Daniel Tal Mor (Zell 7 – 2008) is concerned (whose company Lumen31 was co-founded with his wife), it is “more amazing than
not amazing.” [See the Lumen Case Study and also the 24me Case Study]
But not all ventures are founded by a team of people. Though rarer in Israel, some ventures are founded by a single entrepreneur. “I'm a sole founder. I don't say that boastfully. It's made everything much more difficult and long,” said Steve of YesChef.32 “It took me a lot longer to get to where we are today than it probably would have if I had two or three other incredible co-founders working with me.”
There is at least one distinct advantage, at least at the outset. A single founder can develop their idea at their own pace while employed and until product-market fit is found. Moreover, the idea itself is often the fruit of an individual, rather than a collective experience.33 While it may make things easier at the start, it certainly makes for a tougher time ahead, as Steve attests. [See the YesChef Case Study]
For Steve, the solution was hiring talent in the form of an advisor to help him navigate critical strategic decisions. He sought someone with domain expertise and experience. The advisory capacity morphed into a position in the company as Head of Production. Similarly, in the case of Kano,34 after searching for a technical co-founder and not finding a match, they simply hired their first engineer as the technical lead. [See the Kano Case Study]
Any way the process is initialized, at some point, team growth beyond the founding team becomes critical to the venture’s success. I am a believer from personal and vicarious experience at the Zell Program that team choice is a one-time event, but open communication, trust, and putting mission first is ongoing, and requires founder commitment and hard work.
“The first ten hires are the most important,” says Eyal Gura, (Zell 2 – 2003) based on his wealth of experience in building teams, whether for his own companies (PicScout,35 PicApp,36 or Zebra Medical) or as an investor. [see the Zebra Medical Case Study] These first hires create the backbone of the organization and pass on the culture of the company as the team expands. Many of the Zell alumni founders noted the importance
of culture.
For Yonatan Raz-Fridman (Zell 8 – 2009) at Kano, and now in his company called Supersocial,37 the focus on cultural fit is the priority when hiring in the first place. He believes that after screening through skills for a basic match, the key goal of an interview process is understanding the mentality of the individual and their perspectives in order to gauge cultural fit with his organization. The quality of their technical abilities comes later.
“I believe that as a CEO of a small company or a well-funded company, I think your number one priority should always be on building, nurturing, and retaining a world-class team. For me, it's unconditional,” said Yonatan.
Another interesting facet in gauging cultural fit for Yonatan was ascertaining that each individual already loved the job they were doing before the hire. By targeting individuals who were happy where they were and in what they were doing, and giving them the opportunity to accomplish something even better or more unique, he felt would mean that they were truly enthusiastic about the company.
“Not to say that people who are not happy with their job are not joining you for the right reasons, but I always found it as a really attractive challenge to specifically target people who are having a really great time in their current job. Then, you show them a piece of the future that they really want to be part of and ask them to help you build it,” said Yonatan.
For Nim Bar-Levin (Zell 4 – 2005) of Ono Apps38 and now Dynamo,39 hiring for Ono Apps was about the deep dive into the culture from the first step through the door. The company was housed in a space in a small agricultural village outside of Tel Aviv. With computers strewn around the office, the vibe was more makeshift than high-tech. [See the Ono Apps Case Study]
“Interviewees entered the space and we immediately saw on their face whether they appreciated it or not. It was pretty binary; either a big yes or a big no. Most of our employees were friends who brought friends, and this was very important for us,” said Nim.
The referral element was a key feature. Like Yonatan, Nim found that invariably, it was less about skill set and more about cultural fit. This played out through the acquisition of the company by Matrix in 2015, and beyond.
Moreover, at the time, there were not many experienced app developers. So the focus on skill set did not really make much sense. Nim focused on the cultural fit, and then proceeded to offer the requisite training to turn any candidate into an app developer.
Yotam Cohen of Wibbitz and Daisy feels that the cultural dynamic is a joint effort. Once he finishes recruiting for his new startup, Daisy, [see Daisy Case Study] he plans to have a company-wide discussion on the values, in the interest of defining the culture together. “I want people to feel that it's their culture as well, and that we might change these values if they think we should,” said Yotam.
When Yotam summed up his overarching thoughts on company culture, he shared two main principles:
”In the end, a culture will form in any company no matter the effort made. Yet a company leader, whether it’s a manager or a founder, has the chance to leverage success by way of consciously creating a healthy company culture.” For Yotam, this is an opportunity cost not worth risking. From his experience at Wibbitz, he knew that he would place importance on team and company culture, even before he set out to think of the idea for his next venture. [See the Wibbitz Case Study]
