The Team: Finding the core players

“Great companies start because the founders want to change the world, not make a quick buck.” Guy Kawasaki

When facing chaos and uncertainty, you cannot possibly predict what’s coming around the corner, and your best “strategy” is to have a busload of people who can adapt to and perform brilliantly no matter what comes next.” Jim Collins – arguing for ‘first who, then what’ philosophy of founding.

Let me be clear, no one person built AND 1. Every start-up is fragile, and there were so many people (dozens to hundreds) without whom we likely would have died as a small ember of a business. Every successful venture is a team effort that depends critically on hard work, luck and timing. 

AND1OriginalPartners

AND 1 partners posing for a local media photo shoot on the full court in their offices outside Philadelphia sometime around 2001. Left to right: Tom Austin, Bart Houlahan, Jay Coen Gilbert, Ray Moseley, Guy Harkless, and Seth Berger.

And below is a metal ‘plaque’ given to us by one of our factories when the production of a single shoe passed one million pair for them.

PostGameShoeAward

 

It reads: “In memory of the outstanding performance achieved by a team full of courage, humanity, passion and wisdom.”

I would like to think that was true, but what was undeniably true, was that we were a team. We fought and argued like family, but we also had each other’s backs. We also brought diverse skills and life experiences – maybe not as diverse as was ideal, but none the less diverse. And never forget that this matters, diverse founding teams (in terms of skillsets) are the hallmark of great teams and start-ups are no different. We could have been more diverse.

“Multiple studies on cross-functional teams have shown positive outcomes for product and project quality (e.g., Keller, 2001; Lutz, 1994; Northcraft et al., 1995; Pelled et al., 1999). At the top management level, Hambrick et al. (1996) found that more heterogeneous teams (with respect to functional area, education, and tenure) made bolder (although slower) competitive moves, causing an overall net positive effect on firm market share and profits.” (Source 24).

Who were the ‘key players’ in that team?

AND 1 partners posing for a local media photo shoot on the full court in their offices outside Philadelphia sometime around 2001. Left to right: Tom Austin, Bart Houlahan, Jay Coen Gilbert, Ray Moseley, Guy Harkless, and Seth Berger.

I guess I should start by introducing myself. I’m Tom Austin, on the far left above. When AND 1 began, I was a shy, small town, optimistic New England kid who believed that hardwork always paid off, that people (and the Universe) were genuinely good – and who loved basketball. I mean, really loved it.

I got into the Wharton Business School as a transfer student and studied finance (actually earning a 3.95 GPA – which was important because it gave me a solid foundation in general business skills, and also landed me my co-founders). The only reasons I chose finance were a) it as considered the hardest, and highest prestige major in Wharton, b) it seemed like it could lead to a paying job and c) it was quantitative and therefore had clear answers that made sense to me. There was also the fact that the classes generally fit into my schedule, allowing me to still play several hours of pick-up basketball each afternoon.

Really. I was a kid, and I didn’t even know what working in finance meant, and there was nothing else I really wanted to do outside of basketball.

From the time I was thirteen or so, I had dreamed of playing in the NBA and worked my butt off to try and land a D-1 basketball scholarship.   Every day for nearly ten years for 3+ hours a day on average, 6 or so days a week, I worked at making myself into a better ballplayer. I researched, applied to and attended all the big name camps (sometimes talking reluctant coaches into endorsing me when I wasn’t good enough), I played in high school and even started and played AAU ball for my home state of New Hampshire.

I read books and watched video tapes. I created lists of things I had to get better at, and broke them into small steps, then created a workout and diet regime for myself to try and ‘improve them.’

In fact, I once brought my basketball to Europe in my suitcase so I could do ball-handling drills each day in hotels – and skipped a second family trip to Italy and France to play in basketball camps (where I had worked my way into a ‘busboy’ position, that allowed me to attend for free).

I mention all this, because even though my parents may have wanted me to find better internships that would give me insight into the working world (correctly), basketball taught me how to have a passion and go all-in on it. It taught me to take my passion and create a plan towards achieving it, to work as part of a team, to accept failure and work to get better from it – and how to compete.

Feedback is immediate in sports – and the highs and lows are emotional and visceral. Basketball taught me to be resilient when facing tough odds, to adapt when my first plan wasn’t working — and to fight until time ran out. And if I lost, to get better, and fight again.

And make no mistake, I was a competitor. My Dad didn’t know much about basketball, but he taught me to compete. After every game, he would ask me how many fouls I committed – and if it was zero, he would tell me I didn’t play hard or aggressive enough. And at the end of each day, he would ask me what I did that day that I was proud of. These were two (of many) small lessons where he instilled in me that I would have to fight in this world. He had been adopted and raised in Brooklyn, and new from an early age that the world demanded you fight for what you want. And he passed this on to me.

Basketball also highlighted some of my peculiar character flaws, which were also among my greatest strengths. I remember, in 9th grade, playing an entire half in a Freshman game with a broken metatarsal bone in my foot. Everyone celebrated the fact I did this, and applauded my ‘will to compete’, but that willingness, or is it a need, to push – even through injury – was something that would come back to bite both me and AND 1. But we’ll get to that.

In organized basketball, I was never more than a high Division 3 level starting player, but I excelled on the playground. I had ‘crazy handles’ (that means I could really dribble as a result of the all the ball-handling drills I did). I had style and flair and I loved the ‘jazz’ of it all – the improvisational, no-plans or set-plays version of the game. I loved how free I felt on the court.

I loved the friendships I made on long summer nights, and the fact that I could show up anywhere – at any court in America – and find a game and people to play it with.

So, it’s fitting that I met my co-founder Seth playing ‘hoops.’ He was a few years older than me and in the MBA program at Wharton. He was a tough competitor and irritant who I both respected, and didn’t really like to play against. Even though I knew I had more game than him (I knew I had more game than everyone back then – even those whom I didn’t), he was one of the few guys who made it hard for me to get to the basket or score. And he competed. I respected that.

AND 1 was initially his dream.  Only, it was called the Basketball Marketing Company back then, and didn’t involve selling clothing or shoes.

At 20, I never imagined that I could build a company. I didn’t know anyone who had, and had only met a handful of entrepreneurs in my life. In fact, I had no real plans for what I would do after graduation. I hadn’t had any real internships or even thought about work seriously.  Like I said, I was a small town kid who just always felt that things would work out for me, and I hoped I would be able to stay around the game that was central to my identity.

LESSON: Great schools, and ‘exclusive clubs’, can lead to many chance encounters and ‘happy accidents’ that significantly alter a life course. Always, when unsure, associate with talented people – and stay involved in your passions.

Seth had come to grad school specifically to start a company. He had worked two years on Capital Hill after majoring in Political Science as an undergrad and initially hoping to change the world. Two years of politics had been enough, and he had come to believe that the only way to live a life you could enjoy – was to build wealth and independence working for yourself.

At Wharton, he had invested two years building social networks and developing and refining a business plan for the aforementioned Basketball Marketing Company. The idea was simple, in the very earliest days of the internet – we were going to create the world’s largest database of basketball players – and then create a ‘coupon booklet’ for them. This was going to be a physical paper book with coupons in it. There were many similar models in travel and entertainment and other industries. For a one-time purchase price of $100, you would get $1,000 worth coupons from top basketball brands like Nike and adidas on cool products. The companies would be getting highly targeted advertising for their products, and the consumers would be saving money.

I read his plan, we talked… and then, before I had graduated I was in. Before final exams were over, we were working on this business out of his downtown apartment – calling and driving to see people who ran basketball leagues and summer camps, convincing them (in some cases) to turn over their mailing and player lists, and manually entering them into a database late into the night.

Why did I join? Why not. I was 21 and could keep working in something around basketball, I would get to wear shorts and T’s every day – and Seth wanted me and told me that he wanted me, and he would cover my rent. I was young, and my life was that simple.

That’s how, in 1993, at the age of 21, I became one of the two original co-founders of AND 1.

Seth had courted other MBA students and law students and people much more polished professionally than I was, and no doubt wanted them more – but they wouldn’t join. I wasn’t his first choice, but I was the smartest person (aka the only person) who was also dumb enough to start something with him. And, the decades since have taught me that is often the case at founding. It’s rare that you will find the perfect co-founder or founding team, but be grateful, appreciative and respectful of the co-founders you do find.

LESSON: Start-up and co-founding teams are often comprised of people who aren’t perfect on paper. Beware of fully polished founding teams comprised of people with lots of attractive ‘other’ career options. Most teams that make it, in my experience, have edges.

We were far from a complete founding team. I was very smart, but even more unpolished. I had never worked in any professional setting, didn’t know how to run a meeting, how to set professional goals, how to look another person in the eye and communicate crisply and clearly – and didn’t know what I didn’t know.

About three months into the founding, Seth realized that he needed more help. He had been talking with Jay Gilbert, his best friend since high school for many years about eventually starting a business together – and now was the time.

Jay was engaged to be married and had a good, ‘respectable’ job as CFO of a non-profit up in New York. Once he came on-board, we had the beginnings of a real founding team.  Three is often a magic number – if for nothing else, then there is always a ‘tie-breaker’ in all votes, and team dynamics typically improve significantly as a result.

“In the long history of humankind those who learned to collaborate and improvise most effectively have prevailed.” – Charles Darwin

We didn’t learn to collaborate immediately. Seth and Jay were truly family, and they fought and had a rivalry built over more than a decade – just like brothers. But we were a good founding team – we were smart, we had each others backs no-matter-what (outside the company at least), and we were very persistent and unwilling to quit – at least together.

So, what makes a good founding team in general?

GreatFoundingTeamChecklist

Jessica Livingston is one of the founders of Y-combinator – one of the most ‘famous’ accelerators and early-stage company incubators.   As of 2017 or so, they have funded more than 1,500 companies and more than 10 of them are worth over a billion dollars each. According to her, the one thing successful founders need above and beyond anything else is determination.

We had that.

Jessica mentions the AirBnB example. They were nearly broke in 2008, when they got into Y-Combinator.   They couldn’t raise any money, and had to design and sell boxes of cereal with the presidential candidates on them to keep going, because no one wanted to fund them. No one believed in this idea. Not even Y-combinator. Paul Graham tried to talk them out of the idea during the interview. Even after Y-combinator, it took them a year to go from the idea of renting out air mattresses in people’s homes during concert events to renting your whole home to people.

We nearly ran out of money and nearly went out of business many times, but we always kept fighting.

Jessica lists a number of other important traits that all ring very true to me. I have summarized them (and maybe added a little to them, below):

And over time, Seth grew into a very good CEO for us. He worked at it, and studied management and tried to get better. He wasn’t perfect, none of us were, but we was close to perfect for this brand and this mission and this team.

Seth shouldered a tremendous amount of the pressure and stress to make it. He borrowed heavily on his personal credit cards in addition to his large student loans. These stresses increased his personal anxiety, which deeply impacted the company. But, beyond this – he was our rock.

CEOScorecard

While I give Seth ‘low’ marks in Emotional Stability, this is also understandable. He was under a great deal of pressure – with large student loans, heavy borrowing on his credit card, and a huge feeling of ‘pressure’ to be a success in this.  So, it’s reasonable for him to have been ‘volatile’, but it nevertheless is the one area I’d have to give him a less than exceptional score.   He was all-in-all, a very good CEO for this venture.

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