"Founders need to spend at least 20% of their time outside the building understanding customer problems and needs", Steve Blank. "Teams are the leading indicator of success", Ken Singer The conventional approach of structuring startups as smaller versions of large companies often results in the early formation of functional organizations such as sales, marketing, and business development. Founders might be inclined to replicate these structures, imagining themselves leading a well-organized company with distinct departments. However, this strategy is flawed because it presumes that organizational structures effective for large companies are also suitable for startups. In reality, startups require a different strategy, particularly in their early stages, where the emphasis should be on understanding customer needs rather than creating silos. Instead of immediately hiring executives for sales, marketing, and business development, founders should lead a customer development team. This team focuses on engaging directly with potential customers to understand their problems and align these insights with the product features being developed. Founders should allocate a portion of their time, at least 20%, to interacting with customers to gather valuable feedback. This approach helps ensure that the startup's offerings meet market needs before expanding into traditional functional departments. A common error in startups is confusing job titles with job specifications, leading to the hiring of executives from large companies who may not perform well in a startup environment. The roles of VP of Sales or Marketing in a large corporation differ significantly from those in a startup, where the focus is on discovering and validating a business model rather than executing an established one. This mismatch often results in capable executives struggling in startups because the daily responsibilities and challenges are fundamentally different. Understanding these distinctions is important for startups to build effective teams that can adapt to the unique demands of a startup environment. ## Activities - Watch the video [Organization - How to Build a Startup - YouTube](https://youtu.be/VmPTQk5LVlc) Next: [[Learn to search]] Back to [[Key Concepts on EITT]]