Monday, February 15, 2010

Musketeer as Entrepreneur (Part 6): Building a Team

In our previous installment, Planchet and Co. was formed with pen to paper, recording the term sheet and shareholders agreement between our Musketeer entrepreneur (D'Artagnan) and co-investor (Planchet). Since so much was accomplished and the hour was late, D'Artagnan retires to the room Planchet provided. However, our CEO was restless; there was a lot on his mind.
"..This is it," said he, sitting up in bed, supporting his elbow on his knee, and his chin in his hand; - "this is it. I shall seek out forty steady, firm men, recruited among people a little compromised, but having habits of discipline. I shall promise them five hundred livres for a month if they return; nothing if they do not return, or half for their kindred."
Having been a leader of men for many years and due to his gregarious and generous nature, D'Artagnan had built an extensive network among the nobility and also among the lesser lights. Since he must be stealthy and the enterprise, despite its noble goal -- the restoration of Charles II to the throne of England -- is one that many magistrates would frown upon, he must recruit his employees with care.

Not only is stealth required, the enterprise is difficult. D'Artagnan must choose exceptional, if unrecognized, talent. They should not be difficult to find since what engineer -- sorry, I mean soldier-mercenary -- would turn down an opportunity to join a startup with a celebrity founder, and the chance to redeem and challenge themselves, or at least to make some good money. Yet, how many people are truly exceptional and not merely aspirational?
"...Supposing that among my forty warriors there should be found at least ten stupid ones - ten who will allow themselves to be killed one after the other, from mere folly? No; it is, in fact, impossible to find forty men to be depended upon - they do not exist. I must learn how to be contented with thirty. With ten men less I should have the right of avoiding any armed encounter, on account of the small number of my people; and if the encounter should take place, my chance is better with thirty men than forty. Besides, I should save five thousand francs...Ah! stupid wretch that I am!" continued D'Artagnan, "I want thirty horses. That is ruinous. Where the devil was my head when I forgot the horses? We cannot, however, think of striking such a blow without horses..."

"...Three bands - that necessitates three leaders; there is the difficulty."
We see here that D'Artagnan has realized that not only does he need many good men, he will need managers. So he sketches out an organization chart in his mind and realizes the difficulty of running an enterprise. He is also coming to terms with his limited funds, which while substantial are not unlimited. Many a dot-com was too eager to spend their capital to build a large organization -- like the one the founders came from! -- and founder on the pyre of an excessive burn rate. D'Artagnan, accustomed to large armies, recognized the trap and deftly avoids falling into it.
"..._Mordioux!_ what things patience and calculation are! Was I not going to embark with forty men, and I have now reduced them to twenty for an equal success? Ten thousand livres saved at one stroke, and more safety; that is well! Now, then, let us see; we have nothing to do but to find this lieutenant..."

"...Yes, but a lieutenant must have my secret, and as that secret is worth a million, and I shall only pay my man a thousand livres, fifteen hundred at the most, my man will sell the secret to Monk. _Mordioux!_ no lieutenant. Besides, this man, were he as mute as a disciple of Pythagoras, - this man would be sure to have in the troop some favorite soldier, whom he would make his sergeant; the sergeant would penetrate the secret of the lieutenant, in case the latter should be honest and unwilling to sell it. Then the sergeant, less honest and less ambitious, will give up the whole for fifty thousand livres. Come, come! that is impossible. The lieutenant is impossible."
The larger the organization, the more impossible it becomes to know the hearts and minds of the entire staff. For D'Artagnan this could too easily prove fatal. He quickly assesses the flaws of his original plan and decides to proceed with a much smaller team, one composed of star players and with little maneuvering room to surprise their leader by going rogue.
"...A single corps - _Mordioux!_ a single one, and that commanded by D'Artagnan...

"I reduce myself then to ten men; in this fashion I shall act simply and with unity; I shall be forced to be prudent, which is half the success in an affair of the kind I am undertaking; a greater number might, perhaps, have drawn me into some folly...

"Fifteen thousand livres saved - that's superb - out of twenty!"

...Thus fortified by his laborious calculations, D'Artagnan stopped at this plan, and determined to change nothing in it. He had already on a list furnished by his inexhaustible memory, ten men illustrious amongst the seekers of adventure, ill-treated by fortune, and not on good terms with justice. Upon this D'Artagnan rose, and instantly set off on the search...
There you have it: a low burn rate and a small, crack team. Back in the 17th-century D'Artagnan discovered the winning formula that still eludes so many technology startups. It would be interesting to see how such a man would get on as the CEO of 21st-century startup. He will of course -- to the relief of his employees, I'm sure -- have to leave the sword and musket at the door. Except, perhaps, in Texas.

We will now skip right along and proceed to the sea port where he has asked his chosen few to meet for the company's first all-hands meeting. He chose to not inform any of the ten of the identities of the others, giving them no opportunity to share and compare stories, or to plan any side adventures. Now the team meets in an isolated spot, free of unwanted observers.
"Approach," continued D'Artagnan, "and let not the bird which passes over our heads, the rabbit which sports on the downs, the fish which bounds from the waters, hear us. Our business is to learn and to report to monsieur le surintendant of the finances to what extent English smuggling is injurious to the French merchants...The thing which puzzles me is taking with me a crew of stupid fishermen, which crew will annoy me immensely, whilst if, by chance, there were among you any who have seen the sea - "

"Oh! don't let that trouble you," said one of the recruits; "I was a prisoner among the pirates of Tunis three years, and can maneuver a boat like an admiral."

"See," said D'Artagnan, "what an admirable thing chance is!" D'Artagnan pronounced these words with an indefinable tone of feigned _bonhomie_, for he knew very well that the victim of the pirates was an old corsair, and had engaged him in consequence of that knowledge. But D'Artagnan never said more than there was need to say, in order to leave people in doubt. He paid himself with the explanation, and welcomed the effect, without appearing to be preoccupied with the cause...
D'Artagnan, not to create any jealousy with the others, made the rest go forward. He kept his two selected ones, clothed them from his own wardrobe, and set out with them.

It was to these two, whom he seemed to honor with an absolute confidence, that D'Artagnan imparted a false secret, destined to secure the success of the expedition. He confessed to them that the object was not to learn to what extent French merchants were injured by English smuggling, but to learn how far French smuggling could annoy English trade. These men appeared convinced; they were effectively so. D'Artagnan was quite sure that at the first debauch, when thoroughly drunk, one of the two would divulge the secret to the whole band. His game appeared infallible.
D'Artagnan not only keeps the secret of the enterprise from becoming widely known, he shrewdly even keeps his own staff in the dark. The above passage demonstrates his skill with people by preying on their own natures to ensure that the secret is not even sought for by his band. This goes beyond what most startups must do to remain stealthy although it is not uncommon for a stealth effort to be only partially disclosed to most staff on a need-to-know basis. After all, if you don't know, or if what you do know is a lie, you can talk all you want and never violate the NDA, which is difficult to enforce at the best of times. Trust becomes unnecessary.

This has been the penultimate chapter of the musketeer as entrepreneur series. It is not my intent to recount the entire story as cleverly crafted by Alexandre Dumas. For those interested, I suggest you read it yourself; the link to the Project Gutenberg text (free) was given in the first installment. In the next and final post, I will tie up a few loose ends.

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