Are you the founder of a start-up or scaling-up company (or maybe you aspire to be)? You probably founded your company because you had a great concept for a business and decided to have a go and/or to take control of your own destiny.
Good on ya’ mate! Growing a company can be a lot of fun, but it can also be stressful and challenging, and it pays to have some inkling of the issues you’re likely to face along the way. The flip-side is that it’s easy to get paralysed into inaction by the myriad of opinions on how to go about it. Don‘t let this happen! You must very quickly learn to tread the tightrope between two extremes:
- Just diving in, doing it and perhaps screwing-up along the way. Why would you be at this end of the continuum? Possibly a fear of losing control or taking advice (or maybe you think you know everything there is to know).
- Talking to other folks, reading, planning and perhaps obsessing about the need to get it ‘right’. Why would you be at this end of the continuum? Possibly a fear of failure, or you’re a detail oriented perfectionist.
As with many things in life it’s about balance – neither end of the 1<->2 continuum above is the right place to be.
Ok, so let’s talk Growth and what that means. Of course, it can mean slightly different things depending on what industry and market(s) you’re operating in (or aspire to be), and whether you’re a services or product oriented business, but let’s set these factors aside for a moment and outline why growth in general is hard.
The Hero Founder – Going Where No Man/Woman Has Gone Before
A Founder on their own can often perform all functions of a company during start-up and very early growth phases. Strategy, Product/Service Development, Marketing, Sales, Operations, Finance, Legal, HR/Culture – all of these can be done by one person, until …you can’t, there’s just too much to do!
It’s like the old circus act of spinning plates on sticks. If you concentrate too much on spinning one particular plate …look out, you’re likely to find there’s broken crockery elsewhere as another plate stalls and falls. For a start-up, this is analogous to keeping too close a watch on the Sales plate and perhaps bringing lots of sales in (hooray!), only to find that you’ve swamped Operations (which could admittedly be you too), and customers are grumpy because quality/delivery is poor (whoops!).
At some point, sometimes quite early on, you need to bring additional man/woman power into the business to get more done, or to perform functions you’re not so skilled at. Let’s say you’re great at Sales and not so good at Operations – so maybe you hire someone who has experience of Operations to focus on spinning that plate at the right rate and quality/timeliness, and growing a team around them when the time comes.
So You Take The Plunge
Phew, the first employee is pretty daunting, then you hire and grow, hire and grow, all the while keeping the plates spinning and in equilibrium – hopefully! It can be an exhilarating ride, albeit often exhausting and stressful too. A successful plate-spinning act (startup) requires both skill and judgement from you, the founder. These can be learnt, but sometimes the hard way, so don’t be afraid to reach out to people who’ve done it before. Judgement in particular, being ‘the ability to make considered decisions or come to sensible conclusions’, can benefit from an experienced ‘sounding board’.
So to get from just you, the founder, to 10 staff or thereabouts you’ll need to:
- Lead the team – you need to know who you are, what your leadership style is and lead from the top.
- Ensure you’re able to articulate the values and culture of the company. This is the glue that binds you together when the going gets tough (and it will at some point).
- Have a strategy – yes that’s right both culture and strategy are important.
- Be clear about roles and responsibilities – who does what.
- Define some basic processes – the keyword here being some, but you need to find the goldilocks zone where it’s just enough (not too much, not too little).
- Stay on top of compliance and cashflow – GST, payroll, annual returns, cashflow forecasting, and ensuring that you satisfy your responsibilities as a director. These are not the responsibility of your accountant.
- Keep all of the functional areas in balance as you grow – where the plates are spinning at the right rates, and dustpan and brush are not required.
One day if you’re lucky and have exercised judgement to stay solvent, you may find you’re at 8-10 people and perhaps hitting an invisible wall of growth, but that’s subject matter for another post sometime soon.
A few more words from me on the subject in the short video below …
Neil is a Christchurch, New Zealand based leader of technology companies. He enjoys building high-performing teams and helping start-ups and growth companies scale and export (he has been there and done that himself multiple times). Neil does this through a mix of interim management roles, mentoring, coaching and chairing advisory boards. He’s happy to share war stories and offer a few tips, sometimes just for the price of a decent flat-white (that’s a type of coffee for those not familiar with kiwi lingo). You can find him on LinkedIn here.
Some handy references, all of which have something very useful to say, but take way too many pages to say it:
- Verne Harnish, author of Scaling Up, who distils it down to three main barriers to growth.
- Simon Sinek, author of Start With Why, who emphasises you need to know why you’re doing whatever you’re doing and to get your team aligned.
- Eric Ries, author of The Lean Startup, the bible for start-ups on how to constantly innovate to succeed.