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Tom Brady in Chicago 2010I recently had the privilege of attending a 12×12 dinner where Jonathan Kraft posed the question:

How did the Patriots go from struggling to be competent to absolutely dominant in a period of 8 weeks?

His answers had an uncanny relevance for the audience of startup CEOs, investors, and early stage entrepreneurs.

1. Stack the deck in your favor

The NFL salary cap creates a more level playing field than exists in other popular American sports. But you can still stack the deck. Instead of the assigned one pick per round, the Patriots accumulated 6 picks for the first four rounds of the 2010 draft, and 8 picks in the first four rounds in the 2011 draft. Their picks are higher than their record should allow (for those not familiar, picks are assigned in order of # of losses). They did this by trading picks and managing talent effectively and with a long term view.

Similarly, starting a company seems like it should be as egalitarian as a salary-capped sport. It’s the American dream of a meritocracy where efficient markets create equal opportunity. While at business school I considered many (and heard many more) consumer Internet or SMB Internet company ideas. In fact, I wrote a business plan for a custom tailored clothing business (I’m glad that J.Hilburn is executing on this instead of me). However that “can do” mentality and the small but visible set of counter examples can lead you astray. The reality is that those who are truly likely to succeed (not through the distorted optics of hindsight) are those who have stacked the deck in their favor. They are pursuing businesses in which they have an “unfair” advantage: previous experience, a strong network in the space, information asymmetry, and access to resources and funding.

Of those, the most important way to stack the deck is…

2. Build the right team

How did Belichick know that Aaron Hernandez would have over 100 yards receiving in one game before he could legally buy a beer? Or that Junior Seau still had a few good years in him? Identifying and recruiting talent is critical to success. A football roster is comprised of 53 players. The Patriots, more so than any other team (in my unbiased opinion), prove that the whole is greater than the sum of its parts.

Before starting InsightSquared, I did a project with HubSpot as part of the MIT Sloan Elab course. There, I met Sam Clemens. While I entered school with every intention of starting a company upon graduation, not joining Sam and the rest of the amazing HubSpot team was a very difficult decision. Sam and I stayed in touch, he introduced me to our other cofounder Bryan S. Stevenson, and then later left HubSpot to join us himself. Luck is often manufactured (per point #1). If you want to be a successful entrepreneur, start a short list of people that you want to work with, and hope that your list overlaps with theirs.

Back to the Patriots, stars are also frequently MADE in Foxboro. Players exceed their previous potential because…

3. Cultural DNA attracts and shapes your team

Wes Welker, Danny Woodhead, Randy Moss, the second coming of Deion Branch – these were all players who were unwanted and/or underperforming with their previous clubs, yet they are (and I think Randy still considers himself a Patriot) top performers for the team this year. There are many more examples: Rodney Harrison, Cory Dillon, and Junior Seau to name a few. Players around the league dream of playing for the Patriots, will take lesser contracts (per point #1), and adapt themselves to fit the mold (there is no better example than Moss). When you have a strong core and good culture, the pieces more easily fall into place.

It’s never too early to set the course for your company culture. There are some great examples out there to emulate. Salesforce.com’s 1/1/1 model (1% of time, product, equity) creates a bond among employees and with the community. HubSpot’s well-documented employee-friendly policies have made them a magnet for recruiting in the Boston area. At InsightSquared, creating a strong culture permeates our discussions and holds equal footing with strategy, product and customers.

4. You can’t pause to rebuild

With a young team, in particular the defense and many rookies on the roster, the expectations were low for the Patriots coming into the season. Some early season hiccups sealed the deal in the minds of many that this was a “rebuilding year.” BUT, you can’t have rebuilding years. Not in the NFL and not in a startup.

My cofounder, Bryan, shares this mantra. His stern warning resonated with me: many companies have died on the vine when they were forced to stop to rebuild a product because it was built on top of a prototype. While I was working on the idea this summer I tried to create a forcing function by building the prototype in a language that, while simple, is not en vogue with modern coders. Bryan would tell you that I made the decision particularly easy with the terrible code that I wrote. The lesson is simple, if you plan poorly and come to a grinding halt, you will lose the momentum needed from points #1-3. Build your prototype but then throw it out and make sure the architecture of the product that follows is solid.

5. Weathering the storm

Both Brady and Manning are hall of fame caliber quarterbacks, but how would Peyton do in New England? He and his team are built around playing indoors. 12 of the Colts’ 16 games in 2010 will have been played in a dome. Brady does fine in temperature controlled settings but Bellichick has been known to make him practice with frozen footballs before cold games. I’m not sure if any other quarterback has put together back-to-back snow performances like Brady has one past Sunday or last year against the Titans (let’s not forget the Snow Bowl, though that was less of an offensive masterpiece).

A startup will have many ups and downs, and you need to have a QB and team that are prepared to tough it out and figure out the path to success no matter what the conditions.

Thank you Jonathan, for sharing your thoughts and inspiring the group.

Fred Shilmover
Fred is founder and CEO of InsightSquared. Prior to InsightSquared Fred headed global IT and was an associate at Bessemer Venture Partners. His background includes an SMB consultancy he founded as well as corporate development at Salesforce.com. Fred has a B.S. from Tufts and an MBA from Harvard Business School.
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