Let’s start with the most important characteristic to look for in a start-up.
1. People. I don’t think you can underestimate enough the need for a quality team of people that can work as one and who are dedicated to the success of the company over any individual achievement. If you don’t have the ability to check your ego at the door, then you probably shouldn’t work for a start-up if not for your own sanity, then for the sanity of others around you.
Now some notes on how to get the right people.
1.1. Hiring. For hiring managers at start-ups, start by getting your employees to invite their friends to join the company before going the headhunter route. These are people that you or your co-workers have gone to battle with at previous companies, know their strengths, weaknesses, and have seen them in action at the top of the their game. Even more important is having seen them work in difficult business conditions, under the most stressful of circumstances and deadlines and you would still work them again in a heartbeat.
1.2. Interns. The second best way to increase your talent pool and still maintain the chemistry within the team is to go to the nearest college or university, put up a job opening and bring on highly motivated individuals. The best that can happen is you uncover a valuable addition to the team and by bringing them on early within a start-up they learn about personal sacrifice first hand. The worst thing that can happen is you uncover an unmotivated individual, you let them go after a few months and probably have a few good stories to tell about their exploits.
1.3. Skill set. Skill set does not trump everything in the hiring process. I have spent the last 10 years in the security and networking space and have seen a lot of evolution in how products are built. I believe that any problem can be solved by the highest end intel processor, a base of open source code and a few really innovative engineers*. Look for people that think outside the box, are not afraid of tough problems, and have a genuine interesting in solving real problems rather than showing off their coding skills. There is the rare case when you are developing something that is so unique and requires a rare type of skill set that can only be had for a high price AND you don’t have a direct referral for a person to fill the need. In those cases you have not many choices, but their is a greater risk of lack of chemistry.
*Once you have a proto-type and a business plan you are set to get some funding. If your business plan depends on building a chip to hit aggressive price points or incredible performance levels that you can’t get from Intel or any number of multi-core processors in the next 5 year horizon, then rethink the problem you are trying to solve and talk to your potential customers again. Chances are the problem can be solved a different way.