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As originally asked by Giovanni Lauricella.
Having worked with numerous startup medical device companies, I have come across companies that have the executive team all remotely located, all centralized, or a blend.
Furthermore, I have run into company cultures that are generally relaxed on where their team is located as long as they meet their goals and other companies that are extremely strict that the whole team be located in the same geographical spot.
When building a team within a small organization, how important is it that the team be located underneath the same roof? Why? Thoughts?
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I am probably old-fashioned in my thinking here, but face-to-face communication and one-on-one communication are incredibly critical to the success of any technical or business venture. Just because we can communicate with key team members across the globe does not mean it works as effectively and efficiently as we need. It is still true that business operates at the speed of light, and the ability to interact with team members at a moment’s notice is the most prudent way to operate any business. In addition, day-to-day contact builds relationships and relationships build cooperation.
For a highly sensitive enterprise like a start-up, sitting side-by-side can make all of the difference between survive and thrive.
Sayed Mohammad Ahmad
David Anthony Pearce
The key is to define one’s strategy and laying out what’s needed to effect it. Like I’ve said before, it’s the quality of the work (and yes, that means the individual’s ability to perform that work) that’s critical. Certainly there are issues that address the legal constructs, the NDA’s, IP, regulatory, and other concerns as to who one uses and where they are located but had been the case for many years. It’s part of setting up one’s strategy to get from point A to point B. All things that can affect that strategy do need to be taken into consideration or they will often bite an organization when least expected and often most damaging.
There are some huge advantages that we have found with the new world order and the virtual pool. We have found some incredible people and specialized talent that we could never afford long term that want to be their own bosses and like the freedom of free lancing. Defined projects with good direction, solid follow-up and regular communication can be a big part of the medical device eco-system and be a great way to start or expand your business or opportunity.
There are tremendous pools of talent in the Boston, No. NJ, Minneapolis, Austin, Miami, Orange County, San Diego and SF areas and an incredible infrastructure of people that are entrepreneurs at heart and really talented and experienced people. Look for virtual companies and developing better ways to do it in the future as a key driver to get and sustain business growth in the medical device market.
I do work internationally and never had any problems. Knocking on wood.
Burrell (Bo) Clawson
The other key issue is what do you do with NDA and IP agreements with team members? What happens if you use a member in another country that has different laws? Are the agreements valid if signed in different countries? Can & will a person agree to resolve differences in “your country” if he does not live here in your country?
I have had the situation of people in other countries simply copying & publicly releasing project information, in spite of a “Non-Disclosure Agreement”. There was no way I was going to waste time suing in a foreign country for damages. I don’t do work with people in foreign countries as a result. Life is too short.
Bo, the key is to never give anyone (other than the original founders) their percentages upfront. Ever. It has to be tied to milestones. This is how it works in the med devices LLC we founded in January.
I have often been involved in cross functional multi-continent projects with remote based individuals, and it almost always comes down to the individual. No technology can overcome work ethic, and innovative spirit.
If the commitment is there, sometimes working in a centralized location is a drain on productivity. That is, if it doesn’t matter where the work is done, why expect the person to spend valuable time in traffic/travel when they could be more productive to the organization/project/etc. by working at home. After all, it’s the quality of the work that is ultimately important not the number of hours spent at a facility. Certainly face to face interaction is important but often what happens is people arrive at the central location and either 1) have more ‘visiting’ time or 2) hole up in their office or cubicle to get the work done.
Communication today can take many forms. Face to face, emails, text, fax or scans, Skype, web meetings, conference calls, collaborative software, team rooms, VPN’s etc. can all be part of successful working dynamics. The question really is, where are you, where do you want to be, and are all persons on the journey ready to make sure you get there together. How you do it is really a matter of what works for the team.
Burrell (Bo) Clawson
Can you guess what it is? It is extremely important to YOUR long term success, yet not one single person has brought it up………………Why?
Ownership of the stock and the legal format the company was set up with is CRITICAL.
After doing “Inc” in early companies, almost everything I’ve seen is now LLC and those friends are creating are also LLCs because of the freedom to make up owners and managers as specifically different entities and separate clauses for how profits are shared and when & HOW a member or manager exits and with what if anything.
Ownership may be one or two people who sweat away in their shop creating the concepts and patent applications and that person or two may setup the company, but what about key people added to ensure successful management, implementation and sales? Typically the later key people come in and get stock options exercisable upon certain conditions (highly variable) &/or upon mandatory successful sale of the business.
Since many startups will need external funding to take it to market, you can loose 1/2 to 3/4 or more of your stock in the funding process, so giving stock to other members that come in late can cause significant dilution to the founders. I’ve had several VCs that wanted 80% to fund an operation while others that know my business want ≈40%. I’ve seen lots of people who say they can be CEO and bring in the funding “for only 30%” who in the end, do not have a clue how to do it efficiently. They always want their “%” upfront.
Think these things through with a corporate attorney who you can work with over time to keep you on the straight and narrow. A small % of stock to a great corporate attorney might be a terrific insurance policy over the long run. It is difficult to know everything required as times and laws change.
You do NOT want to take in a permanent shareholder who might not stay stable (how can you predict the future) or not contribute for the long run and if you do you want to be able to get rid of him or he can take down the team.
Once you get your killer idea, get a ‘killer’ corporate attorney before you get additional “partners” to keep all the bits and pieces aligned to the end goal.
If you are looking to create some ‘new thing’ from only a rough concept, then a virtual team may not work, but if you have the concept nailed down, that roadblock is removed.
If you don’t have ‘buy-in’ from all the team members (they share in the excitement of achieving the objective), then a virtual team could be a problem, but if everyone shares in the vision, it really doesn’t matter where people are located.
The team leadership has to understand that virtual teams have a different dynamic than in-place ones. No matter how ‘committed’ the team members are, managing this activity WILL require more direct leadership involvement.
It also is a great assist to physically assemble the virtual team members once every few months. This helps to sustain the team ‘spirit’ and fosters better on-going communications.
Burrell (Bo) Clawson
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