Building Deep Tech Teams for Startups
Part 1: Knowing the journey
If you’re involved with hiring for startups, you already know how important it is to get the team right. You also know how hard it is.
With the right team, technology is developed, scaled, and commercialised. Capital is raised. Partners and customers are attracted. Business thrives and generates value.
With the wrong team, only some of the above will happen, if you’re lucky.
So how can you increase your chance of getting it right, particularly if you’re a Deep Tech startup? That’s what this piece is about.
I run an executive search firm, Deep Tech Leaders. For more than 25-years, I have supported the development of leadership teams for advanced science and engineering startups. I’ve been a part of team building that has worked. I’ve been a part of team building that hasn’t worked. And so, with the benefit of the lessons that a 25+ year career bestows, allow me to share.
Before we get started, let me say there are no panaceas when it comes to high performance team building. This is a multi-dimensional challenge that taxes even the most experienced. Having said that, there are a few ‘golden rules’ I’ve learned to follow that decrease the risk of mis-hires and increase the risk of great ones. Knowing the journey is one of them.
Before we dive in, let’s quickly cover the basics.
The Deep Tech Basics
Number 1 - Deep Tech is not a sector. It’s an umbrella term for hard to scale advanced science & engineering. Think large language models, quantum computers, semiconductors, novel therapeutics, waste to energy platforms, nuclear fusion reactors, advanced materials, and more.
Number 2 - Deep Tech company journeys are long, hard, and expensive. They face every kind of risk imaginable – technology, scale up & engineering, financing, commercial – and yet their aim is the same as every other company – to deliver a solution that answers a market need, on the back of which they can build a thriving, successful business.
Number 3 - we need Deep Tech start-ups to succeed. They address some of the biggest problems facing humanity. We may not need another payment app or digital bank. But we desperately need cleaner energy sources, more effective vaccines, and innovations that decarbonise global industry.
Number 4 - start-ups remain the best way of delivering such innovation. They go where larger corporates will not, taking bolder bets and moving faster. Corporates need them. Humanity needs them.
The Lab to Market Journey
Building the right Deep Tech team starts by understanding the Lab to Market journey – the distinct phases, stages, and milestones that nearly every Deep Tech company must pass to have a chance of delivering their solutions to market.
I say ‘nearly’ because it does not apply entirely to one of the most well-known areas of Deep Tech, Artificial Intelligence, which has a development path more in line with traditional software innovation. The AI path is just much more complicated, time consuming and expensive than traditional software.
For every other Deep Tech platform, however, the Lab to Market journey is relevant. When you understand the journey, you can think more clearly about the skills, experience and qualities required to have a chance of successfully making it from one end to the other.
So, what does this journey look like? Let’s start with the 10,000-foot overview.
Broadly speaking there are three phases.
The first phase is about DEFINING your solution. If you know your Technology Readiness Levels (‘TRLs’), we are talking about TRLs 1 – 5, which include the Research and Prototype stages. Your starting point is in an actual lab and by the end of this phase, you’ve got a working prototype of your solution in a similar environment to that of your target customer.
The second phase is about SCALING your solution. In terms of TRL, we’re covering 6, 7 and half of 8, which includes both Pilot stages, and part of the First-of-a-Kind (‘F.O.A.K’) stage. The F.O.A.K milestone represents the first commercial-scaled unit of your innovation, the size required to properly serve your target industry.
The third and final phase is about COMMERCIALISING your solution. It covers off the balance of TRL 8 through to TRL 9, including the move from First-of-a-Kinds to improved versions of your solution (known as ‘Nths-of-a-Kind’), and eventually, the market. It is at this final stage where customer acquisition and revenue generation activity can accelerate with confidence, given that a validated, market-scale solution now exists, with your business supplying and supporting the solution in the way your customers and partners expect.
Now, some particularly important things to note.
Firstly, despite these labels, each phase of the Lab to Market Journey contains an equal amount of Technology Development, Scale Up & Engineering, and Commercial activity. The naming of the phase is merely indicative of the key goal associated with the phase.
Secondly, the goals for each phase cannot be realised unless these three forces – Technology Development, Scale Up & Engineering and Commercialisation – are working in harmony. This means that defining the solution is NOT just about technology development; that scaling the solution is NOT just about engineering; and that commercialising the solution is NOT just about business development. Each of these forces must play a crucial role in DEFINING, SCALING, and COMMERCIALISING the solution.
Thirdly, Technology Development, Scale Up & Engineering and Commercial activity are the three most important forces at work in the Lab to Market journey. The success of the rest of your business – including all other functions within the group – rests on these three critical activities. If you don’t have a handle on these, you will not have a business.
Finally, building the right Deep Tech team means appreciating the evolution of these primary forces during the Lab to Market journey. Understanding their dynamics will help you build the right team for each phase of your journey.
The Early Part of the Journey
For example, when we are DEFINING the solution – certain activity is taking place that doesn’t happen in the other phases.
Technology development is the initial catalyst for most Deep Tech businesses. TRL’s 1-3 involve research and development, with the aim of giving life to a new, innovative platform. Work takes place in a lab, involving hypothesis, experiment, observation, and iteration, until an emerging, stable, and relatively well performing platform emerges. Creativity, work-rate, and speed are important here.
Concurrent with this activity is early scale up & engineering consideration. This typically kicks in at the end of TRL 3 and includes early design, equipment, and supply chain considerations, along with early evaluation of unit economics. The likelihood of early technology prototypes leading to truly scalable pilot plants is increased by the involvement of engineering at the early stage.
In parallel is commercial activity, which ensures the technology to be developed and scaled will solve genuine market problems. Primary and secondary research are the main routes to this discovery process. Primary research involves direct meetings with different executives (technical, operational, commercial) within potential target industries, asking questions, listening carefully, asking better questions, listening more carefully, and repeat, until a clear, defined, problem is identified. The bigger and nastier the problem, the better.
Secondary research includes market analysis, IP research, scientific journal reviews, business model and pricing exploration, etc. It is this research that allows a company to create a solution for a wider market, and not just one client. Together, primary, and secondary research help to identify and shape the nature of the problem the company will eventually address.
Critically, each of these activities will feed into one another. Insight derived from commercial research should impact the direction of technology development and scale up approach. Unit economics consideration must impact the technology approach and commercial proposition. Technology performance and advantage will shape the scale up approach and nature of the commercial proposition. These forces work and wrestle with one another to ultimately arrive at the right solution.
Hopefully, this summary sounds familiar to many of you.
Given the nature of this activity then – and this represents the briefest of summaries of this early stage – what does an ideal team look like?
Early Deep Tech Team Profiles
I’m going to cover off the profiles associated with the three critical functions – Technology Development, Scale Up & Engineering, and Commercial. Why? Because as stated previously, they are the most critical. Most of the problems that Deep Tech companies face at this stage of the journey are rooted in one or more of these three areas.
Ideal technology leads are creative, versatile, comfortable with iteration, and not ideological about approach or technology. Like any scientist worth their salt, they’re guided by problem solving and the Scientific Method. But like any entrepreneur, they’re also focused on innovation and the delivery of a platform with the greatest potential of success. Managing this balancing act can be a challenge.
Early-stage scaleup and engineering leads need to be comfortable with novel technology development from first principles. They need to appreciate design, prototyping and setting the foundation for early pilot units. An awareness of broader issues and challenges related to manufacturability, regulatory, quality, supply chain, and of course, EHS are important. Admittedly, such considerations are less relevant in this early phase, but they do raise their heads during the Scaling phase. Part of knowing when a prototype is truly ready to scale comes from the early consideration of such operational issues.
Commercial leads should be analytical, action-oriented, relationship developers - great at sizing markets, defining opportunities, and building trust amongst different stakeholders, most of whom will be a part of large corporates. This early phase is less about traditional deal making and more about partner enrolment, engaging a potential industrial partner or customer to play some kind of role during the scaling phase and support the definition and ultimate validation of the solution.
The best commercial talent at this stage will typically have a technical background as either an engineer or scientist. Such a background allows them to have deeper discussions with technical stakeholders. It allows them to get at the nature of the problem being fleshed out and contribute actively to the consideration of prospective solutions. Such a background also helps them connect the dots between primary and secondary research and build trust faster with prospective partners.
Each one of these critical actors must be hands-on player/managers, with the breadth to play outside of their respective box. Each should be action-oriented, possess high confidence, a low ego, be radically candid, inherently generous, and of course, collaborative. A good sense of humour is mandatory.
Why these skills, backgrounds, and qualities, and not others?
Frankly, because teams who meet these criteria have the best chance of achieving the goals and milestones expected of the first phase in the shortest timeframe. This includes identifying the big, nasty problem that needs solving; delivering a functional technology platform that addresses this problem to TRL 5, with the appropriate consideration for manufacturability, supply chain, engineering, and unit economics; enrolling a potential industrial partner / customer; and developing the early versions of a value proposition and business model.
Teams embodying these skills work together, move & fail fast, build trust, and create a level of excitement around their activity. Strangely, their breadth (and subsequent lack of domain depth) may also give them an increased chance of creating stronger product-market-fit, as opposed to more dogmatic domain or technology experts (topic for another piece). Founders, including academic researchers are prevalent during this stage, and quite rightly so. They possess vision, high energy, and the magnetism to engage others. Breadth, not depth, is especially helpful here.
But once the milestones associated with this early phase have been delivered, the next set of goals loom, those associated with the next phase. How many of the skills from the DEFINING phase are portable to the SCALING phase?
Deep Tech Team Skill Evolution – New Skills, New Leaders?
The goal of the SCALING phase is a validated, TRL 8, First-of-a-Kind solution – a market-ready version of your solution at the scale your value chain partners / customers expect. To get to this point from where you started will require a technological, operational, commercial, and cultural transformation.
As such, it is during this phase where most Deep Tech startups fail. Maybe not immediately – but eventually.
Why?
The transformation required is enormous. You’re going from a ‘flying by the seat of your pants’ startup to a provider of world-class solutions based on world-class ways of working. Large corporates have taken decades to get there. You’re expected to do this in a much shorter period of time.
Not surprisingly, we see a gradual shift in the required skills. We move from creating and defining solutions, to building to specification on time, every time. We move from early prototypes to demonstrator plants to pilot plants of increased size and scale, until we’ve arrived at commercial scale. We move from fail-fast environments to systems and processes governed by quality, precision, health, and safety. We move from identifying and shaping the problem and solution, to negotiations with industrial partners and our first slate of deals.
The scaling phase then is about a shift towards greater expertise, deeper domain relevance, and more sophisticated management.
This doesn’t happen overnight – nor should it. While the transformation starts during this phase, it tends to complete during the following phase, at which point the company’s ‘world-class’ operation needs to be in place. But the plan to get to ‘world-class’ is initiated here. It’s a careful balancing act.
Can individuals that led and managed so successfully during the first phase lead through this SCALING phase too?
This depends on their abilities and capacity for growth. But in my experience, new leadership and management skills are often required between the DEFINING and SCALING transitions. Maybe not for every function, and certainly not all at once. But unless the company has a deeply rooted understanding of what ‘world-class’ looks like and has a path to achieving it across the organisation, they are unlikely to successfully navigate this next phase.
The same is true of the jump to the COMMERCIALISATION phase, where we move from building our organisation so that it can perform at a level that is considered ‘world-class’ to operating full-time, 24/7, at this world-class level.
It’s a transformation from a handful of early deals to a system and team focused on aggressively capturing market share. We see the introduction of recognised sales practices, including key account management, lead generation, sales targets, etc.
Technology development becomes industrialised, with a proven capacity for consistently delivering the highest quality solution at the right price and right time. Engineering, manufacturing, and operational capabilities are recognised as world-class, increasing the trust of the industry and thereby accelerating growth further.
All key functions are in place, operating as a finely tuned symphony, with each knowing their part and delivering world-class performances.
And what of the change in skills?
There’s a greater likelihood of skills from the SCALING phase extending into the COMMERCIALISATION phase. But nevertheless, there is a distinction between building up towards ‘world-class’ and consistently ‘operating’ at world-class. They are not the same.
But here’s the thing. All of this change is exactly the point. The goal of the journey is to transform, to become a truly world-class, profitable business that acts like other world-class, profitable businesses, without losing the ability to innovate at scale.
When you know this journey, and the skills required to navigate it, you understand when it’s okay to rely more on academic researchers with less professional experience, and when it’s not. You understand when it’s okay to hire sales and growth professionals versus strategic business development leads. You understand when it’s okay to consider talent from larger corporate environments versus generalists from proven start-up backgrounds.
It all starts by understanding what lies ahead.
Closing
Deep Tech journeys are Lab to Market journeys. They are not Enterprise Software journeys. Or Internet journeys. Or established industrial company journeys. They don’t come with established playbooks and frameworks. They are more challenging, more expensive, and more time-consuming – and with a higher failure rate compared to other tech startups.
But the trend can be bucked by defining your own Lab to Market journey. By getting clear on what the milestones associated with your TRLs, MRLs and CRLs should look like. By identifying the likely obstacles, setbacks, and challenges you will face. By considering what ‘world-class’ looks like across your industry. And by considering the skills, capabilities and qualities required to give you the best chance of making it.
I hope this helps.
Onwards.
