Scott Maxwell founded OpenView Venture Partners in 2006 and has worked in venture capital for over 13 years. He focuses on distinctive business models and products that uniquely address a meaningful market pain point. This includes a broad interest...
The Expansion-Stage Management Dream Team
The Expansion-Stage Management Dream Team
Everyone remembers the NBA’s original Dream Team. It was brilliantly assembled with a triumvirate of the sport’s all-time greats — Magic Johnson, Larry Bird, and Michael Jordan.
The team made a mockery of the 1992 Summer Olympics, beating its opponents by an average of 44 points en route to the gold medal. The team was balanced, star-powered, and built with a very specific goal in mind: to put the United States back on top of the world ranks.
So what does that Dream Team have to do with expansion-stage software companies?
A lot, actually. American basketball was a little bit more of a behemoth on the world stage than most expansion stage businesses are in their markets. But the assembly of talent and its ability to work together to execute a strategy is a pretty good parable to learn from.
After all, as an expansion stage company begins its metamorphosis, the management team must start to transform; founders can no longer expect to handle everything that a maturing and evolving business will throw their way. So they must form a management team with a variety of skill sets that can cohesively work together to execute a long-term strategy.
At the early stage of a company, the best teams have a product person, a lead engineer, and a sales/marketing guru. If all three are great, the probability of getting to the expansion stage goes up quite a bit.
For the expansion stage, I’ve put a lot of thought into what my expansion stage Management Dream Team would look like. Here are the key roles and why each one is important.
The Core Dream Team
The role of the expansion stage CEO should be very clear on the company’s aspirations (mission, vision, and values), target customers, and brand promise. CEOs should also maintain control of the company’s economic model and excel at company development strategies (which includes getting the right dream team members working together to do the right things). The CEO should also be able to check all the boxes in this list to make sure the company is locked and loaded for the year.
The person in this role must be able to pull the team together to maximize market clarity, identify business growth strategies, and uncover ways to create competitive advantage. The marketer should also be gifted at demand generation, but ultimately, getting the market clarity right will make demand generation easier to achieve.
The product manager identifies the best target customer segments, finds unique target customer insights, turns those insights into great product designs, collaborates with the development team to implement them, and works with the sales and marketing teams to sell them. The best product managers will also recognize the huge value that an interaction designer has to his/her team and hire one!
Quite simply, the development head is counted on to organize a team that builds quality products with high velocity and rapid iterations. They should also be able to achieve a high score on the Nokia test, which measures whether a company is actually using the Scrum methodology, or simply feigning an attempt at it.
Customer Service Head
This Dream Team member should focus on having a high net promoter score, while also working hard to incorporate customer service insights into the company that dramatically reduce customer issues.
An expansion stage company’s sales head needs to be gifted in developing sales methodologies (prospecting, inside sales, field sales, channel sales) and high performing teams that are relevant to the company’s product market. Note: this is particularly critical for B2B companies, but it also plays an important role in many consumer oriented businesses.
Business Development Head
An all-star in this role understands the product market ecosystem and can build out the company’s own ecosystem with limited disruption.
Last, but not least, every Dream Team’s core group should include a chief financial officer that can create a basic financial process. More importantly, he or she can also develop a thoughtful target economic model, helping the management team understand and achieve it.
In a perfect Dream Team world, each of those members would:
- Earn the highest respect from the company’s other senior managers (because they are that good)
- Manage their units effectively and efficiently with limited involvement from the CEO
- Work well with each other to drive the company toward its aspirations, create competitive advantage, and improve its economic model performance
Other roles on the Dream Team
While the roles above would form the core of my ideal Management Dream Team, there are other complimentary roles — depending on the nature of a company’s product markets — that might also be included. They are:
Professional Services Head
If a company has professional services, the person in this role can ensure development and delivery of those services, while also managing to target gross margins.
If a company has merchandise it needs to procure, a merchandising head can identify what buyers want (keeping appropriate margins in mind) and ensure that the company gets the right merchandise at the right cost.
This, of course, only applies when a company has fulfillment and reverse logistics. If that’s the case, a Logistics Head can ensure that those logistics are effective and efficient, and that the inventory is managed appropriately.
Every company is different
Because very few expansion stage companies share the same product markets, strategies, and aspirations, your Dream Team may be very different than mine. Take some time to think about what your company’s Dream Team would look like. You should have a target team in mind and work toward that goal. Where do you stand against that Dream Team today? It might be time to accurately assess your position and begin to take steps toward assembling that team.
Top talent is out there waiting to be recruited, and you should always be working on pulling in your next Dream Team member.