Startups are by their very nature changeable, and as the startup grows constant evolution to the team’s structure is crucial to match the fast pace.
We probably don’t have to tell you that a startup, by its very nature, exists in a constant state of flux. The successful ones also grow with astonishing speed, meaning more change, faster.
This intrinsic volatility is something many founders of startups and their employees thrive on, the expectation being that the product stays fresh if the team are kept on their toes. Nonetheless, this mode of rapid change and hyper growth results in a need for constant evolution – and a company structure that is just as fluid.
What are the different growth stages?
There are a number of growth stages that startups go through which influence the way teams are structured. We’ll look at these through the lens of seed levels.
The pre-seed level team
This team tends to be made up of two, maybe three people who cover all bases, working on discovering an idea and attempting to find customers so they can grow. This team is extraordinarily fluid and comes with an ‘all-hands-on-deck’ mentality.
The seed stage team
During the second stage there’s normally team of between five to eight people. At this point you’ve found the idea and are starting to develop it, and the team at this second stage is all about furthering your idea on the business end of things. At this point you’ll likely have your first customer(s) and will be busy developing your product.
Between seed and Series A the team is feeling that early traction and focusing their first investment on building out the product. At this point the company has a relatively simple structure, with many or all employees working on the product exclusively, resulting in a laser-focus on one common goal.
The Series A team
Once your startup has reached Series A you suddenly have the capital to start bringing in the senior leaders. It’s usually at this point that you hire a head of marketing and a head of sales as two more ‘pylons’ are added to a company that used to be all about the development side of things.
As you ‘fill in’ the areas where you are the weakest initially, the structure gets significantly more complex. The CEO’s role goes from overseeing the whole company to typically managing a team of six people that are themselves responsible for two or three individuals. It’s at this stage the company must build collective accountability and support one another. As individuals become responsible for different aspects, the CEO’s role pivots around creating cohesion within that team as they become less and less involved in day-to-day operations.
The key lesson of startup growth is, of course, adaptation – especially for the company’s leaders. Some have a harder time adapting to the innate volatility of their company over time depending on their personality and what they see in the company. As a rule, it tends to be those who invest their ego in the company and base their value on the output who have a more difficult time adapting.
What’s crucial is to understand that, as the business grows, the extraordinarily-effective way you did things at the beginning doesn’t make sense anymore. It’s simply not scalable. And if you don’t feel like you’re changing even though the company is, then you’re stagnant. Ironically, if you constantly feel like you’re underperforming and letting people down, you’re probably doing it right.
If you get one takeaway from this article, let it be this: If you’re not a bit uncomfortable, you’re probably doing it wrong.
Watch Igor discuss his experiences scaling a startup and the DataSine journey on the ScaleUp Valley podcast.