Overcoming the Perils of Leadership when Building Blockchain Startups

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Building a startup, any startup, is guaranteed to be difficult, but building a blockchain startup increases that difficulty by more orders of magnitude. You are building a new product on novel technology against the din of critics and skeptics. The regulatory waters for blockchain startups are murky — there’s no playbook on how to build your idea, and there’s no guarantee that you’ll find product-market fit. Yet, you must keep the vision alive, keep your team inspired or motivated, and continue building— and this is where leadership counts. 

In my more than 20 years of leadership experience in operations and marketing across multiple companies such as Lifehouse Concepts, Six Degrees Group; hosting and working with a long list of top celebrities including Cristiano Ronaldo, Ed Sheeran, Katy Perry, Selena Gomez, and Drake; and now leading Precog — I’ve found that leadership is necessary across all levels from the top executives to the lowest-ranked employee. 

Here are 3 major lessons I have learned about facing and overcoming the challenges of leadership when venturing into uncharted territories.

1. Bring in the Right People

As a leader in a startup, some of your biggest challenges will show up in the areas of people operations. Some people would be chronic underperformers, demotivators, unreliable, unpersonable, or outright troublemakers. The best way to manage such people-problems is to avoid them from the onset by hiring people who won’t slow you down with their issues. 

Hiring the right people requires the leader to be self-aware enough to recognize potential hiring pitfalls such as hiring someone solely because you know them, they need help, are charismatic, or have low salary expectations. As a founder, CEO, or someone leading a startup operating in new markets; you can’t afford bad hires. You need to be biased towards hiring the right people into your team in terms of the right skillset, mindset, culture fit, and experience. Building teams of skilled workers, after skillset criteria, and would argue equally as important if not more is the cultural fit. Like minded people naturally energize each other, similar to my current team at Precog Finance where special things happen after onboarding - collaborations are seamless, thought processes align, and real magic appears in the quality of work and ideas produced.

Hiring the wrong people could cost your startup scarce resources -  the U.S. Department of Labor estimates the average cost of a bad hire to be at least 30 percent of the employee's first-year expected earnings. A 2014 study by Gallup estimates that the cost of actively disengaged employees to businesses in the United States was between $450 billion to $550 billion in lost productivity annually. 

Beyond the measurable financial costs, factoring in the time, effort, and resources lost in hiring the wrong person, training them, and then hiring a replacement also bleeds your startup. Similarly, if the wrong hire was in a client-facing role, they could have caused some reputational issues for your company. 

2. Ensure Good Communication and Focus Within the Team

The second leadership challenge you’ll most likely face while leading a startup is communicating effectively to get the team to rally around the mission you intend to accomplish. I recently came across a study conducted by McKinsey Global Institute, International Data Corporation, and the Journal of Communication, which suggests that leaders spend up to 78% of each working day communicating across speech, emails, social media, and phone calls among others. 

Unfortunately, there’s no one-size-fits-all to overcoming leadership challenges relating to communications. The communication challenges you’ll face as a startup operating as a fully remote team will be different from the challenges facing a team operating onsite. Similarly; you’ll have different communication challenges when you are a team of 5 versus when you are a team of 50. 

Nonetheless, some general thoughts for improving communications and focus within the team include; understanding the mission of the company, how you plan to achieve the mission, and how you intend to track milestones for reaching that goal. You also want to provide some clarity on what you are doing, what the rest of the team is doing, and how individual activities fit into the overall mission of the company. 

To avoid leadership challenges, it is important to note effective communication is a two-way street. I’ll encourage being intentional about seeking employees’ input and feedback through active listening, especially on issues relating to their wellbeing, working conditions, and how they like to be managed. More importantly, two-way communication stimulates innovation by encouraging employees to communicate their ideas, drives action by aligning goals, and it ultimately reduces conflicts within the team. At Precog Finance, while we have digital project management software to coordinate workflow, I encourage workshop video meetings within departments, inter-department video meetings to update the team as a whole what milestones have been achieved, currently working on, and things they may need assistance with to discuss. This gives the team the opportunity to discuss ideas, comment and give feedback, and allows remote teams to connect on a deeper level. I also personally call each and every team member at the end of the week to see how they are and if there’s anything they need help with.

3. Leverage Human Capital for Peak Performance

It is one thing to hire the right people, it is another thing to organize them towards achieving a common goal. The third leadership peril you’ll need to overcome is finding how to organize your team to do their best work. The people are the greatest assets in any organization, and the task of optimizing human capital for peak performance is a management and leadership function. 

Human capital is a construct that broadly refers to the knowledge, skills, and experience of the people working within an organization; when properly harnessed, it could provide the organization with competitive advantages. To harness human capital for peak performance, you’ll need to institute a performance management process that promotes ownership and accountability. All team members should have clarity in how their role impacts the objectives of your startup and they should be encouraged to come up with initiates that aid the achievement of those objectives. 

Another idea I’ve found really helpful for leveraging human capital within the organizations I’ve led is to create a structure around how we determine who progresses into managerial positions and provide clarity on milestones that lead to internal promotions into leadership roles. Once employees can see a clear path for their career progression and that path aligns with their career interests, it tends to transform the team into a purposeful, committed, and sustainable workforce.

Final Thoughts 

Emerging technologies such as blockchain are still novel and the quality of your team has a direct impact on the odds that your startup will survive, grow, and thrive. However, the quality of your leadership is perhaps the factor with the greatest impact on the quality of your team. Interestingly, leadership is not a one-off task; you’ll make some mistakes, learn from them, and improve your leadership aptitude. The most important thing I can tell you about overcoming the perils of leadership in a new market is that you should strive to gain a decent understanding of the core principles of leadership, develop a learning mindset, and make an unwavering commitment to self-improvement.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. The content was purely for informational purposes only and not intended to be investing advice.