When it comes to running a startup some things can only be learned through experience. As is the case when your bootstrapped startup grows by leaps and bounds seemingly overnight – nothing can prepare you to navigate that kind of rapid company expansion successfully quite like being in the trenches. Through my own journey leading a company from zero to 300, some valuable lessons worth sharing came to light:
Aim to give different departments within your company an equal voice from day one. If you actively incorporate collaboration into every fiber of your company, it will help establish culture as an essential value and will cement the idea that great teams are more important than heroic individuals.
While the notions of persistence and continuous iteration can provide value for any company, maintaining a culture of continuous improvement can be especially important for a young company. Mistakes are inevitable regardless of company age or size, but you have to make sure to treat those mistakes as learning moments – rather than letting it become a detriment, you need to convert those mistakes into organizational memories that will strengthen the company in the end. A culture of continuous improvement also helps create a culture of humility where you are always asking yourself, and your team, how you can be better.
Growth really shines a light on good employees – those first-round pick, Olympic medal-winning athletes. The company’s needs can change so quickly that the roles and responsibilities you define for people can become obsolete months after being defined. Good athletes are able to stretch themselves to meet the rapidly changing needs of the organization while other folks are not. During the rapid growth stages, it is important that you have enough leaders in the organization that can both stretch to fit the evolving needs and put the interests of the company above their own. When you find these people, empower them to act on behalf of the organization and ask for forgiveness, instead of requiring them to ask for permission.
Make sure that senior management has a higher upside from equity than they do from a salary. Especially in a potential bubble environment like mobile was in 2009, it’s so important that senior management focuses on building a business that succeeds in the long-term, rather than being too focused on driving short-term profit. The delayed gratification that comes from equity over cash is most conducive to building a culture where people are running a marathon and not a sprint. If you couple this with a commitment to build the company over at least an eight-to-ten year period, it helps ensure that you build a mission-driven organization instead of a greed-driven one. A mission-driven organization can survive a hiccup in growth or a recession far better than a greed-driven one can.
These days, more and more companies are being founded by young adults, my company included, and that can provide a lot of unique strengths – but great people management is not one of them. When the euphoria of the first couple of years fades and the fact that you are running a marathon sets in, it is super important that you bring in patient, experienced people that can partner with you in growing the business. Chances are, you’ll find yourself learning as much from those experienced people as you learned from personal experiences running a company.
One of the worst mistakes you will likely make early on is hiring the wrong person. When you make the mistake of hiring a bad employee, the risks are mitigated. When you hire a bad manager, the risks are magnified. When you hire a bad senior executive, it can be disastrous. Bringing senior talent into the company is critical, but it’s easy to get this wrong, especially if you focus more on their skills and experience than whether they are a cultural fit. And worse still than making a bad hire is not acting quickly to reverse it. Just like an untreated wound can quickly worsen, rationalizing a decision to avoid confronting a painful situation can be very damaging to the organization. It is easy to forget that inaction is a decision too. Chances are, you’ll never regret asking someone to leave your company – only that you didn’t do it sooner.
Class vs. Discussion
When you live in a fast-growing company, you are exposed to an incredible amount of new information and experiences throughout the day. But these experiences don’t automatically turn into insight and knowledge. That requires reflection and discussion just like classes in college. “Debriefs” with colleagues inside or outside the company are a great way to solidify your point of view on a particular topic. No matter how busy you get, be sure to give yourself the time to reflect on your day and to surround yourself with smart people that you can talk about your day with.
Inside vs. Outside
You should walk a fine line between focusing externally and internally. Spending a significant amount of time listening to what your customers and partners think about your business is invaluable and can help ensure that the company is properly aligned to the needs of the market and your customers. But a time comes when the internals of the company – Finance, Planning, Recruiting, HR – all require a lot of time and attention as well. It can be tempting to ignore these in the interest of sales and revenue generating activities, but an underdeveloped operations infrastructure can be paralyzing because growth becomes painful. The company will come to a stop if it lacks an ever-improving set of operational tools, processes and people.
Every company is unique, and what worked for one through its growth process might not work for another. But through the trials and tribulations experienced while learning to manage your own company’s growth, you’ll learn a few things the hard way that will be remembered forever. It’s those lessons – the ones that mark life stages as tattoos mark your body – that you truly learn from, and can use in the future to help other young companies navigate their own challenges in their journey to grow a company.