The agile structure of a small startup is immensely appealing. Communication is swift, and maximum output per person is achieved by the very structure of the team.
However, maintaining a small team is incredibly difficult as a company looks to scale. The goal might be to keep positive aspects of a tiny organization alive under a larger operational umbrella, but the reality is that many startups cannot square the two objectives. Here are three of the most common challenges facing an idealistic startup looking to innovate and grow:
1. The Hero Syndrome and its Impact
Often a startup is the brainchild of one individual – or a small group of individuals – committed to making the business succeed. These “heroes” tend to work long hours, borrow tons of money, and refuse to outsource important tasks. And it can work for a while. A small team of experts with shared idealistic goals can make solid headway into a new market.
But what happens when one of the members gets sick, hit’s burnout, or leaves? The entire infrastructure of the company has to be re-designed, as that one person had helped set-up the structure of the company and designed it to suit their needs. The fact is, a company cannot grow sustainably if the leadership is unwilling to expand the team and disperse responsibilities effectively.
2. No Predictability, Lack of Process
Startups can push products to market in record time. Compared to larger firms, who often plan their launches a year in advance, startups can rush products to market numerous times a year. This seems like a competitive advantage, right? Not so fast.
Small companies are limited by a lack of predictability – both in terms of assessing risk and in planning product launches. With no launch deadline, everything is done in a hurry. The PR team is unable to land great press; the marketing team is running short campaigns without success; there is no coordination between a launch and new hires, and the sales team is left struggling to push products no one cares for.
Laying the groundwork for a launch is as essential as the product itself – but getting there requires planning, organization, and predictability.
It might be easy for a startup to make the first 20 hires. Employees at this stage will say yes to a pay cut to work for a lean, exciting, high-risk, high-reward business.
However, as the company starts to see modest growth, it can be hard to find skilled people willing to make the same kind of sacrifices. Usually, people at the top of their fields have been through the ringer and know what it’s like to work in the startup world. They are familiar with the risks, aware of the pressure, and usually unwilling to go back to working with strict budget limitations.
For startups looking to expand their team, the challenge is to forge a healthy business culture around shared ideals. Firms that present a genuinely impactful vision to employees and the world will be able to recruit the best in the field. And yet, more time is always spent on improving technical specs instead.
Bringing It All Together
Scaling a startup is, in some ways, harder to achieve than starting a company in the first place. Hard-headed entrepreneurs must realize that agile organizational principles are usually not applicable when the firm begins to see real growth – otherwise they risk miss-managing their one shot at success.
Guest Author: Jim Barnish is Co-Founder and General Partner of Morgan Hill Partners, an innovative management consulting partner that helps startup to scale-up technology and tech-enabled clients innovate and grow through Strategy & Planning, Executive Leadership, Product Excellence and Revenue Creation – delivering the right executive expertise and strategic playbook, at the right time, for the right outcomes.