Entrepreneurship is hard. Having a great idea is hard. Throwing away great ideas and having better ideas is hard. Finding others to help you to develop your ideas is hard. Raising capital or bootstrapping is hard. Acquiring customers is hard. But the greatest challenge to face an entrepreneur is often “scale”.
As your startup approaches key milestones – the first remote development team, the first Fortune 500 customer, the 100th employee – you must change and adapt to new conditions or risk losing what you have built. What got you here, won’t get you there.
I recently read an interesting article by Jason Lemkin called “6 Key Signs a VP Can’t Scale Beyond $5m – $10M ARR“. It contains some pretty decent advice for entrepreneurs as they review and edit their leadership team to achieve scale. The article is written a little negatively though, so let’s reword it in a positive light!
Be organized. If you are small you can be both successful and disorganized. Your sheer force of will is enough to get things done. Plus your entire team lives in a single office/basement/garage so you can just talk to your colleagues. As you grow you will not have the luxury of being disorganized. You need performance metrics, project managers, CRM systems and capacity planning.
Hire great people. Hiring people is scary. Hiring people that are smarter than you is very scary. Hire amazing people that will drive growth and, if you are worried that they might outsmart you, work hard to elevate your own game accordingly. B-players will not get you where you need to be.
Companies compete in two markets: the market for customers and the market for talent. Compete equally ferociously in both.
Diversity matters. Hiring like-minded people can be acceptable or even desirable in the early days. Cohesion of vision can help you to focus. But as you grow you need to add people with new skills, different backgrounds and fresh, challenging ideas. A great hire can be very different than you. They extend your culture rather than simply fitting in.
Be OK with large numbers. As your company scales, the numbers can be intimidating. From 5 to 10 to 100 developers. From $1M a year to $1M a quarter to $1M a month. You need to be OK with this. Don’t freak out.
Distribute the team. It’s almost impossible to keep up with growth by simply hiring more people in your hometown. Your customers aren’t all in your hometown. The talent isn’t exclusively in your hometown. If you are based in North America or Europe its hard to maintain a good cost-base by restricting yourself to your hometown. You need to be OK with developing teams in other cities, countries and continents. You also need to be OK with the consequences of these changes: working in multiple languages, Zoom calls and decentralized decision-making.
Be OK if someone is hired over you. Sometimes the board or CEO will decide to hire someone over you. In their estimation, they need more horsepower to take the company to the next level. You were the best engineer reporting to the founder. Now here comes a VP Engineering or a CTO and you report to them now. Park your ego. Remember that you’re probably still the best engineer. Take advantage of your new colleague’s new energy, fresh eyes and strong skills. Don’t quit.
