Within 12-18months a venture backed startup will expand from the founding team, to a larger core team and then the need for management in different parts of the organization are required as the company expands.
Hiring strong executives is critical to a company’s success over time. But it’s not easy to do.
A few weeks back Ben Horowitz wrote a post about how founders should consider scaling their organization. It’s well worth a read. I especially like Ben’s image of an offensive linesman in his post and how founders should hire but give ground grudgingly.
There is a great analog to this concept in American Football. An offensive lineman’s job is to protect the quarterback from onrushing defensive linemen. If the offensive lineman attempts to do this by holding his ground, the defensive lineman will easily run around him and crush the quarterback. As a result, offensive linemen are taught to lose the battle slowly or to give ground grudgingly. They are taught to back up and allow the defensive lineman to advance, but just a little at a time.
When you scale an organization, you will also need to give ground grudgingly. Specialization, organizational structure, and process all complicate things quite a bit and implementing them will feel like you are moving away from common knowledge and quality communication. It is very much like the offensive lineman taking a step backwards. You will lose ground, but you will prevent your company from descending into chaos.
There are two benefits of scaling the team this way. Ben highlights the most important one at length in his post. Communication. If you give ground grudgingly you will keep communication lines clear.
The other benefit to this approach is managing costs. I’ve seen some capital efficient startups start to scale and then they bring in the senior executives who then hire rapidly in their own groups. Sometimes that’s necessary and extremely helpful but sometimes it can grow out of control with VPs hiring VPs who then build out an even more vertical group. Suddenly the organization is overstaffed up and down company and politics enter the picture.
I’ve seen many founders fight title inflation to avoid this very scenario. That’s not easy when trying to attract senior staff but it’s something to keep in mind.
The challenge for founders/CEO is to give ground grudgingly and balance that with letting go. It’s hard to attract great managers when they don’t have the ability to make things happen.
So be careful when hiring your senior staff. Make sure expectation are set up front on both sides.