See the wall. Scale the wall. See the next wall.
After working with 52 companies at various stages of growth, building a small team in Chicago, and talking with startups of all sizes, I’ve seen a clear pattern of organizational maturity emerge.
I wanted to share some of my findings and continue to map out the patterns of organizational maturity in order to better serve entrepreneurs facing those challenges.
For example, Drew Houston, Dropbox CEO, describes it as scaling walls:
“If you’ve never started a company, or worked at a smaller company, you’ll run into a vertical learning curve, Houston says. There’s no way to know everything you need to from the start, so you need to a) gain as much knowledge as you can as fast as you can, and b) plan ahead to learn what you’ll need months down the line. You have to be prepared for a never-ending conveyor belt of challenges.
‘You have to adopt a mindset that says, ‘Okay, in three months, I’ll need to know all this stuff, and then in six months there’s going to be a whole other set of things to know — again in a year, in five years.’ The tools will change, the knowledge will change, the worries will change.’” Article Link
The good news for entrepreneurs and their teams is that by studying multiple companies at once, it’s possible to better set expectations of what’s coming next, what others have done at their transition, and how to anticipate or avoid the biggest mistakes.
Patterns in Hyper-growth Organizations
We’re going to look at the framework for growth. The goal is to innovate on that growth. In terms of methods, the companies I’ve explored are high-growth, technology-driven and venture-backed organizations. They experience growth and hyper-growth (doubling in size in under 9 months) frequently due to network effects, taking on investment capital, and tapping into a global customer base.
Every company hits organizational break-points. I’ve seen these happening at the following organizational sizes:
- Early : Under 15 employees
- Momentum: 15- 30 employees
- Expansion: 30 - 50 employees
- Growth: 50 - 75 employees
- Scale: 75- 150 employees
- Dunbar: 150+ employees
Revenue, amount of capital raised, type of company, size of audience, product maturity and other factors vary among all of these companies, but the challenges they face at the different organizational sizes are the same.
I plan to dive a little deeper into each Growth Stage in a series of blog posts over the coming week. I’ll cover what new challenges arrive, what pieces of the organization a company should already have figured out, and what decisions should be held off on at that point.
I hope to share some of the things I wish I knew when I was an entrepreneur. And hey, it may help alleviate that feeling that you’re the only one scaling those walls.
Solving Challenges at Scale:
At USV, my goal is to test which methods work best for sharing these best practices and delivering information right when a team might need it. Most of the work is still in progress, so let me know if you’ve been doing any research in this area.
I’ve leveraged a lot of knowledge around networks, as the framework for how we deliver this knowledge:
Instead of building a centralized method to deliver knowledge, the USV Network uses knowledge across the network to share best practices. The next challenge is how to leverage that network to provide advice and guidance before it’s even requested.
For example, if a company has 15 employees and plans to hire to 30 in the next 6 months, helping provide knowledge that they’ll likely need to hire an office manager or they might need to consider more advanced payroll and insurance tools for employees. The team member feels comfortable asking their peers for advice on existing problems, but doesn’t have an easy way to anticipate the challenges ahead.
Connecting peers at all levels helps surface some of these topics but I think we can take it further. The holy grail would be a resource that anticipated what the company needed in advance and helped educated them along the way so they would have the information they needed when they were ready to make the decision.
It’s not ready yet but it’s in the works. If you have thoughts on things that have worked for you, please let me know in the comments or on Twitter.