MARCH TO IPO (Part of a series): What comes first? Money or people?

"John, I have a great idea for a startup. Should I next go get some angel money and get started? Or should I find the management team first?

That is a great question. It is central to the success of building a startup. Here is what I have learned:

• People are more important than money. People do the work and without them, money is idle.
• People attract the money -- not the reverse. If you find people who will not join you without the money in the bank, they are the wrong people to join you to do your startup.
• Money invests in people -- not ideas. People have the idea. They give life to the idea. Money wants to invest in great people with ideas, not ideas missing great people.
• Ideas need both people and money to grow. Plan with your people when to get the money, how much, from whom, when. Like watering a garden, you need to be wise, neither over or under watering, choosing the right times to pour on the water and other times to refrain.

So think about a triangle with three elements connected: People + Idea + Money.

Then think about the sequence to connect them: (1) One person gets an idea => (2) The idea attracts the core management team => (3) The people attract the money. This is described in detail in "The 14 Steps to IPO" in my book, High Tech Start Up.

What is hard about this for solo engineers is the attraction of the people. Engineers think they can take a great idea to venture capital investors, get the money and hire a recruiter to get the management. But that is not how to create a world-class new enterprise.

Next time I'll address questions about how to find great people for your core management team.

BOTTOM LINE: Start with finding the people. It is worth the extra time it takes. Wise entrepreneurs work for years to create a core team. After that they go after good ideas for the core team to use to form a great startup. When you understand the power of that principle, you'll be well on your way to forming your unfair competitive advantage.