1. Choosing Partners for New Venture Creation
“Union may be strength, but it is mere blind brute strength unless wisely directed.” Samuel Butler, 1882

2. Choosing your partners is one of the most important things you will do during the pre-launch phase
If you choose wisely, you will function as an integrated, cooperative team
If you don’t, there will be friction, conflict, and inefficiency
So do choose wisely
And that means thinking about the following issues:

3. Similarity Versus Complementarity
We are most comfortable with people who are similar to ourselves
BUT: this is not always the best basis for selecting cofounders (partners)
Benefits:
Better communication
Better working relationships
More accurate social perceptions

4. Simlarity feels…good! But…

5. There are real dangers of Similarity, too…
Redundancy—shared and overlapping knowledge, training, skills, etc.
Shared perspective—so they see the world in the same way and miss a lot!
Pooling of weaknesses as well as strength
Typical Team: people who know each other; same major, same classes, same friends???
Best teams, though are heterogeneous not homogenous

6. In Large Companies…
Project Teams are designed to be heterogeneous—people from different departments, fields
So, big companies know this, but do we???
We don’t make a fuss about it if we do!

7. How Important is the Team?

8. That Talk was Based on Data
He studied lots of companies
He rated them on each of the five dimensions (idea, team, timing, funding)
And found that the companies high in several dimensions did best—but after the idea, the team was second—and ahead of the others

9. So, how should we choose partners?
On the basis of a careful self-assessment
This will reveal our own strengths and weaknesses— what we know and don’t know, what we are good at and not so good at …
And this will tell us what we should seek in potential partners
What should we assess?

10. Always, ALWAYS! Think: I need partners who know what I don’t know
I need partners who have skills I don’t have
I need partners who are stable, can ‘hang in there’
I need partners with whom I can communicate—so too different might not be best
(Curvilinear!!!)

11. Self-Assessment: Key Dimensions
Knowledge base: what you know
Specific skills: what you are good at doing
Motives: what you want to accomplish
Commitment: can you continue in the face of adversity?
Personal attributes: e.g., Big Five

12. The “Big Five” Dimensions…Very Basic Aspects of Personal Style
Conscientiousness--organized, dependable versus
disorganized, unreliable
Extraversion: Gregarious, sociable versus reserved, timid
Agreeableness: Cooperative, trusting versus uncooperative and suspicious
Emotional stability: secure, self-confident versus anxious, insecure, suspicious
Openness to experience: creative, curious, many interests versus practical, “mainstream,” few interests

13. A self-assessment Where do you stand on these dimensions?
Overall advice:
Focus on complementarity with respect to knowledge, skills, experience
Focus on similarity with respect to personal characteristics and motives– after all, you have to get along to move forward!

14. Where Do You Stand on the Big Five?
To find out, rate yourself on each item below (1 = lowest; 7 = highest) Scoring will be explained after you complete the scale
How reliable am I? ___
How carefully do I complete jobs? ____
How readily do I make new friends? ___
How cheerful and friendly am I? ___
How trusting of others am I? ____
How cooperative am I? ____
How much do I worry? _____
How confident and secure am I? ____
How much do I like change? _____
How much curiosity do I have? ____

15. Where do entrepreneurs stand?
Higher than others in conscientiousness
Higher in openness to experience
Higher in emotional stability
But Not higher in extraversion or agreeableness--lower
As Hao Zhao puts it: “Entrepreneurs have to be selfish—look out for themselves, not others…”

16. What Do You Do to Make a Good Impression
Imagine that you are visiting a potential customer
His/Her order is very important
You know your product is good
But—how do you also impress the customer—how do you get her/him to like and trust you?

17. Additional Hurdles to Choosing Excellent Partners
Impression Management: The Fine Art of Making a Good First Impression
Self-enhancement: increase our appeal to others
Other-enhancement: make others feel good in various ways; this leads to positive first impressions
What do you do to make a good first impression on others?
Do you remember ADVERSE SELECTION-- and INORMATION ASSYMMETRY?
Economics’ terms for the same thing—and for choosing partners

18. Tactics of Self-Enhancement—others use on us, and we use them!
“Looking good”—effects of attractiveness revisited
Describing oneself in positive terms (a little boasting!)
Name-dropping
Emphasizing (or expanding) one’s credentials

19. Tactics of Other-Enhancement
Flattery
Expressing agreement
Praising the target person’s organization of affiliations
“Wining and dining”
How can we cut through these tactics to figure out what other people are really like?

20. Recognizing Impression Management by Others
Due diligence: check all credentials and claims
Be aware of flattery
Watch out if others agree with you on everything
“Trust everybody…but cut the cards.”

21. The Trap of Empty Words
Many companies say: “Our people are our most precious resource.”
Do they really mean it?
And do entrepreneurs realize how important it is to surround themselves with good people?
Many think they are the engine and steering gear!—everything! But no one can be good at everything…

22. Deception: Beyond Impression Management
People often pretend to be what they are not or to have reactions or views they don’t really hold
Example: entrepreneurs do sometimes stretch the truth when trying to generate enthusiastim about their ideas
How can you see through these efforts?
Micro-expressions
Inter-channel discrepancies
Non-verbal aspects of speech
Eye contact
Exaggerated facial expressions

23. After Choosing Partners: Building Strong Working Relationship
Good working relationships between cofounders or between founders and key employees is crucial
How can such relationships be built? (It takes work!)
Some guiding principles:
Clarify roles—what each person is expected to do—responsibilities and jurisdiction
Work hard on fairness—and watch out for the self-serving bias
Work hard on communication—especially on giving feedback in a constructive rather than destructive manner

24. Destructive Criticism Examples
Constructive Criticism
Destructive Criticism
Examples
Considerate
Inconsiderate—harsh, sarcastic
“I was disappointed in your performance”
“What a rotten, lousy job!”
Does not contain threats
Contains threats
“I think improvement is really important”
“If you don’t improve, you are history!”
Timely—occurs soon after poor performance
Not timely—occurs much later
“You made several errors in today’s report.”
“I remember when you screwed up two years ago!”
Specific
General
“The main problem was that the project was late.”
“You did a really lousy job.”
Focuses on performance, not the recipient
Focuses on the recipient
“Your performance was not what I hoped for.”
“You are a lazy good-for-nothing!”
Offers concrete suggestions for improvement
Does not offer concrete suggestions for improvement
“Here’s how I think you can do better next time.”
“You need to work on improving!”

25. The bottom line… Choosing good partners is crucial
Selecting people just like yourself has a real downside
Better: choose partners whose skills, knowledge, etc. are complementary to yours
And build strong working relationships with them because you will certainly face lots of stress…