What do Startups & the Best Sports Teams have in Common

March 10, 2015

· 4 min read
Elemental Excelerator

Last week we chatted with Kathryn Mykleseth of the Star Advertiser about building a successful startup (check out her article in the Star Advertiser). Below we’ve taken the conversation a bit further, adding an analogy to one of our favorite sports teams (sorry Laker fans!):

Over the past 3 years, we have analyzed over 400 companies. Every startup is unique and there is no cookie cutter approach. But there are definitely similarities between our most successful companies, just as there are similarities between the best sports teams, as they grow and progress.

Here are 3 common threads and what they have in common with the 2008 Boston Celtics:

1. A strong starting 5: This doesn’t mean get the top 5 players in the league on your roster or 5 of the world’s top CEOs on your team. It means building the strongest core possible and filling in the gaps around them. Let’s break it down:

Kevin Garnet, CEO – Instilled the championship mindset Paul Piece, Founder and COO – Cornerstone of the modern-day Celtics and always executing in crunch time Ray Allen, CFO – Steady shooter that spread the floor and played the odds Rajon Rondo, Role player – Created opportunities for his teammates Kendrick Perkins, Role player – Did the dirty work

Much like the Celtics the most successful startups typically build strong core teams, then hire role players to fill in the gaps. Team is one of the key things we look for at the Energy Excelerator because without a strong team, you don’t make it to the playoffs. Let’s look at our portfolio company Ambri for example, for 2 reasons:
1) they have an awesome team; and
2) they’re headquartered in Boston.

Donald Sadoway invented the technology in his lab at MIT. Knowing his strength as a visionary technologist, he built a core team of business and energy experts around him. Today Ambri has raised millions of dollars from Bill Gates, Khosla Ventures, and others; and Sadoway serves as Ambri’s Chief Scientific Advisor. This year they’ll be deploying their first grid-connected batteries in Hawaii.

2. A flexible game plan: If the Celtics had a startup status, today it would read “currently pivoting”. But let’s forget their current 23-35 win-loss record and take it back to Game 4 of the 2008 NBA finals. The Lakers led by 24 in the 3rd quarter before the biggest comeback in NBA finals history. The play that capped the momentum swing was a reverse layup by Ray Allen in the 4th quarter. The play was originally drawn up as a pick-and-roll with KG, but mid-shot clock Allen made a read and waived KG off, laying it up instead. Flexibility is key in growing a startup into a commercial company. What do you do when your customer discovery results show that your market isn’t homeowners, as you thought it was, but rather building owners?

Ibis Networks, one of our portfolio companies and recently named Cleantech Entrepreneur of the Year by the Hawaii Venture Capital Association’s, made a big pivot a few years ago. Originally targeting homeowners, Ibis Networks tested their energy efficiency solution with 100 homes on Oahu. After speaking with homeowners about their experience and researching other customer types, they decided to pivot and target commercial buildings.

3. Capital (in all its forms): This one has nothing to do with basketball, but I didn’t want to leave it out in trying to stick to the analogy. As capital-intensive startups travel through their lifecycle, there we’ve seen a common funding pattern (shown below) that involves different forms of capital:

Angel > grant > early-stage VC > accelerator > later-stage VC > banks

Funding is what pushes these companies from idea to prototype, from prototype to demonstration, and from demonstration to commercialization.