When we think of startup success, it’s natural to focus on a few well-known metrics: financial performance, product-market fit, and scalability potential. Founders, investors, and even startup program managers often find themselves drawn to these measurable aspects. And why wouldn’t they be? Numbers are tangible—they give us something concrete to point to when evaluating a startup’s chances of survival. Yet, there is an essential element that tends to get overlooked in the rush to analyze these outward metrics: the team.
It’s one of the most significant paradoxes in the startup ecosystem. While startups are driven by people, the effectiveness, cohesion, and adaptability of the team behind the idea are often treated as secondary factors, or even ignored altogether. But make no mistake: it’s the team that breathes life into the idea, executes strategies, and adapts when the going gets tough. Yet, how do we evaluate teams effectively? And why has team evaluation remained such an underutilized metric in the success equation?
In this post, we’ll delve into why team dynamics are the missing piece in the startup evaluation puzzle and explore how incubators and accelerators can adopt a more holistic approach when assessing startup potential. We’ll introduce a specific tool—the Investment Readiness Assessment (IRA) tool by The Brutally Honest Innovator (TBHI)—which is designed to offer real-time insights into team performance and cohesion. If you manage a startup program, this post is for you.
Why Team Dynamics Matter More Than You Think
Let’s start with the basics. In the early days of a startup, the product, technology, or market may capture the headlines, but it’s the team that does the hard work behind the scenes. Without the right team dynamic, even the most brilliant idea can falter. So why does team dynamics matter so much in the early stages?
Consider the many challenges startups face: limited resources, constant pivots, and unpredictable market conditions. These are formidable challenges for any organization, but for a startup with fewer resources, the pressure is exponentially higher. In these environments, the team's ability to work together becomes critical to surviving and thriving. As cliché as it sounds, a startup truly is greater than the sum of its parts—provided those parts can function cohesively.
Startups are inherently fragile ecosystems. The early days of any venture are rife with uncertainty, risk, and rapid decision-making. In such a high-pressure environment, the quality of the team is often the deciding factor between success and failure. Teams that communicate well, adapt to change, and trust one another are far more likely to navigate the complexities of the startup world than those that lack these qualities.
Why Do We Undervalue Team Dynamics?
Part of the reason team dynamics are undervalued in the startup world is that they’re intangible and difficult to measure. Financial performance can be tracked, user growth can be quantified, and even market readiness can be mapped out. But how do you assess something as abstract as trust or collaboration within a team?
Many accelerators and incubators operate on evaluation models that focus on these measurable outcomes—product traction, financials, market strategy—because it’s easier. These are the elements investors want to see and what program managers are pressured to deliver. As a result, team dynamics often fall into the category of “soft skills,” which don’t seem urgent in the fast-paced environment of a startup.
However, seasoned program managers and investors know that many startups fail not because the idea was bad, but because the team couldn’t function. This could be due to interpersonal conflicts, poor decision-making, or an inability to adapt to changing conditions. Yet, traditional evaluation frameworks often fail to catch these issues early because they’re too focused on the external elements of the business.
Think about it for a moment: a startup could have a groundbreaking idea, but without a cohesive and functional team, that idea may never reach its full potential. A dysfunctional team can lead to delays in product development, missed market opportunities, and ultimately, failure. Despite the importance of team dynamics, the startup world often overlooks this factor because it’s difficult to quantify. You can measure revenue, but how do you measure trust? You can track user growth, but how do you track the ability of a team to resolve conflicts?
This is where the challenge lies, and it’s why the industry needs tools and frameworks specifically designed to assess team performance—not just as a secondary consideration but as a core aspect of the startup evaluation process.
The Unseen Forces: Trust, Communication, and Cohesion
Now that we’ve established why team dynamics are important, let’s explore the three main components that make up a strong startup team: trust, communication, and cohesion.
Trust: In the startup environment, decisions need to be made quickly and often without perfect information. In these moments, team members must rely on each other. If trust is lacking, the entire decision-making process can slow down or break down entirely. Imagine a situation where a team leader is unable to delegate because they don’t trust their team members to handle critical tasks. This lack of trust can become a bottleneck, stifling the team’s agility and slowing down progress. Trust is the invisible thread that binds the team together, allowing them to make swift decisions in the face of uncertainty.
A team without trust is like a car without fuel—it might have all the right components, but it won’t go anywhere. Trust allows teams to take risks, knowing that their colleagues will have their backs. In an environment as volatile as a startup, risk-taking is essential. Without trust, team members may hesitate to share new ideas, push boundaries, or make bold moves that could lead to a breakthrough.
Communication: It’s often said that communication is the backbone of any organization, but in a startup, it’s the lifeblood. Miscommunication or poor communication can lead to misunderstandings, duplicated efforts, or even project failure. Effective communication means that every team member understands their role, the project’s objectives, and how their contribution fits into the bigger picture. Whether the team is working remotely or sitting together in the same room, a lack of communication can cause confusion and frustration. For example, imagine a technical team not fully understanding the business priorities, leading to delays in product development. This disconnect could have been easily resolved with better communication protocols.
Communication is not just about talking; it’s about ensuring that the right information flows between the right people at the right time. In startups, where resources are often stretched thin and roles are fluid, clarity in communication is paramount. A lack of communication can lead to inefficiencies, duplicated efforts, and even project failure. Conversely, clear, open communication fosters collaboration, encourages innovation, and ensures that everyone is aligned on the company’s goals.
Cohesion: While trust and communication are essential, they are not enough on their own. Cohesion is what keeps the team united when things go wrong—because let’s face it, things will go wrong in the startup world. A cohesive team is resilient. It can handle failures and setbacks without falling apart because the team shares a common vision and knows how to weather the storm together. Cohesion creates a culture where each member feels valued, motivated, and accountable to the team’s success, not just their own.
Cohesion is the glue that holds the team together when the going gets tough. In the early stages of a startup, setbacks are inevitable. A cohesive team can handle these challenges without falling apart. They understand that failure is part of the process and that success comes from perseverance. A team that is cohesive will stay focused on the long-term vision, even when short-term obstacles arise.
The Team Paradox: Great Ideas vs. Great Teams
Here’s the paradox: while we often equate startup success with great ideas, the truth is that great teams often outlast great ideas. History is full of examples where startups with mediocre ideas but exceptional teams managed to pivot into success. Conversely, we’ve seen startups with fantastic ideas collapse because their teams couldn’t execute effectively.
Why does this happen? The answer is simple—execution is key. A good idea might capture the attention of investors or program managers, but without the right team to execute it, that idea will remain just that—an idea. Execution requires not just technical skill but also the ability to collaborate, communicate, and adapt. A great team can turn an average idea into a thriving business because they know how to execute effectively, and more importantly, they know how to pivot when needed.
A perfect case study can be found in companies like Slack. Initially, Slack was a gaming company that created a game called "Glitch," which failed to gain traction. But the team behind it noticed something—they had built an internal messaging tool that they loved using. Instead of giving up, they pivoted, took their internal tool, and turned it into one of the world’s most popular workplace messaging platforms. It wasn’t the idea that was brilliant from the start—it was the team’s ability to adapt and execute that led to success.
Another example is Instagram. Before it became the photo-sharing app we know today, Instagram was called Burbn, a location-based check-in app with various features. However, the founders realized that users were most engaged with the photo-sharing aspect of the app. The team decided to pivot and focus solely on photos, which turned out to be a wildly successful decision. The pivot worked not because the original idea was bad but because the team behind it was adaptable, cohesive, and open to change.
The Problem with Traditional Evaluation Models
Given the importance of team dynamics, why are they so often overlooked? The answer lies in the way we traditionally evaluate startups. Most accelerators and incubators operate on models that prioritize hard metrics like revenue growth, product development, and market penetration. While these are essential metrics, they don’t tell the whole story. A startup’s success isn’t just about the numbers; it’s about the people behind those numbers.
Imagine a scenario where a startup enters an accelerator program with a great product and early traction in the market. On paper, everything looks perfect—revenue is growing, user acquisition is on track, and the market fit seems solid. Yet, a few months into the program, the startup begins to struggle. Conflicts arise within the team, communication breaks down, and key decisions are delayed. Despite the promising initial metrics, the startup’s progress grinds to a halt. What went wrong?
The problem wasn’t with the product or the market—it was with the team. Traditional evaluation models failed to identify these issues early because they focused too much on external metrics and not enough on the internal dynamics of the team. By the time the problems became apparent, it was too late to address them, and the startup’s potential was significantly diminished.
A Framework for Evaluating Teams in Startups
So, how can incubators, accelerators, and competition programs incorporate team evaluation into their processes? At The Brutally Honest Innovator (TBHI), we’ve developed a framework specifically for evaluating startup teams. This framework is based on three pillars: Collaboration, Adaptability, and Leadership.
Collaboration: Startups are inherently collaborative. Unlike larger companies, where roles are more rigidly defined, startup teams often have to wear multiple hats and work closely together on a wide range of tasks. But collaboration is more than just working together—it’s about how well team members support each other, share ideas, and leverage each other’s strengths. The best startup teams aren’t just a collection of talented individuals; they are cohesive units where each person’s contribution enhances the work of the others.
Adaptability: In the fast-paced world of startups, change is the only constant. The ability to adapt quickly to new information, market changes, or even unexpected failures is critical. A team that is too rigid in its thinking or unwilling to pivot when necessary will struggle to survive. Adaptability means being able to change course when needed without losing momentum or morale. It requires a team that is comfortable with ambiguity and able to embrace new challenges with an open mind.
Leadership: In early-stage startups, leadership is often shared among team members rather than concentrated in one person. This distributed leadership model allows startups to be more agile and responsive. However, it also requires clear communication and decision-making processes. Leadership in a startup isn’t just about setting the vision—it’s about empowering others to take ownership of their roles and make decisions that drive the company forward.
How to Implement This Framework in Your Program
Now that we’ve established the importance of team dynamics and outlined a framework for evaluating teams, how can you implement this in your startup program? The key is to integrate team evaluation into your existing assessment processes rather than treating it as a separate component. Here are a few practical steps you can take:
Incorporate Team Dynamics in Your Selection Criteria: When selecting startups for your program, look beyond the product and market potential. Ask questions about how the team works together, how they handle conflict, and how they make decisions. Consider using behavioral interviews or team-building exercises as part of the selection process to get a sense of the team’s dynamics.
Monitor Team Performance Throughout the Program: Don’t wait until the end of the program to assess the team’s performance. Make team evaluation a continuous process by conducting regular check-ins and feedback sessions focused on team dynamics. This will help you identify potential issues early and provide support to help the team address them.
Provide Resources for Team Development: Offer workshops, mentoring, and coaching focused on improving team collaboration, communication, and leadership. Many startups fail not because they lack a great idea but because they don’t know how to work together effectively. By providing resources for team development, you can help startups build the skills they need to succeed.
Introducing the Investment Readiness Assessment (IRA) Tool
To help address the challenges of evaluating team dynamics, we’ve developed the Investment Readiness Assessment (IRA) tool. This tool is specifically designed to provide real-time insights into team performance, helping program managers assess team cohesion, communication, and adaptability.
The IRA tool doesn’t just focus on financial metrics or market readiness—it goes deeper. Using data collected from the team’s interactions, decision-making processes, and adaptability, the IRA tool provides a comprehensive evaluation of the team’s dynamics. It offers clear, actionable insights that allow you to identify potential red flags early and provide targeted support to help the team overcome any challenges they may face.
By incorporating the IRA tool into your startup program, you can ensure that you’re not just evaluating the product or market but the team behind the product. This holistic approach will give you a more accurate picture of a startup’s potential and increase the chances of long-term success for the startups in your program.
