The culture practised during the initial stages of a tech start-up forms the backbone of a company in later years.
But as start-ups expand, team alignment and coordination become increasingly challenging mainly because rapid growth takes a toll on the resources – or structure – of a company which can eventually lead to a complete collapse.
A survey conducted by tech blog, ArcticStartup, and a magazine called CoFounder – in which more than 100 entrepreneurs were asked to share their experiences – backs this up.
While the growth of a business is incredibly important, it’s also pertinent to stay nimble as the company expands.
The presence & absence of structure
A tech start-up is typically responsive and agile with an “everyone does everything” mentality – this is a great practice when you’re operating on a scale that consists of fewer than 30 people as tasks can be easily coordinated between individuals.
But if the same is practised in an environment with a larger number of employees, this will result in overlapping focus on one task while others get left behind with no one looking into it.
People unfairly single out structures and processes but these are necessary as they ensure efficiency when working together.
Even a two-man start-up has a structure to it; you do half, I do half. The key is to remember that processes are a means to an end and that end is meeting the need of the marketplace.
If you’re adapting to changing needs and this requires a change in process – do it! There is nothing sacrosanct about sticking to old processes and claiming that this is how it always has and must be done.
Businesses should not turn processes or structures into rigid elements because it kills enthusiasm and ingenuity within a company.
Meeting market needs & finding the right skill set
The requirements when growing a company also differ to an extent for start-ups that provide products versus those that provide services.
For a product company, it’s about always finding a niche that meets a need or solves a problem. A services company on the other hand grows with finding the right type of people. What’s common to both is funding.
One of the main reasons start-ups fail is that you’re entering unchartered territories and once you get there you find that the problem is bigger than anticipated.
The key to overcome this is to find the right mentor who can help your company avoid some of these pitfalls that you yourself wouldn’t have the foresight to predict.
Another important aspect that businesses need to practise as they experience growth is to keep up with the evolving market needs. If you don’t meet the needs of the group or market you are addressing, you’ll invariably collapse.
When we started our company over a decade ago, the focus was on providing Salesforce CRM (customer relationship management) solutions and at one point we realised that we can’t be a one-trick pony – we had to expand into other areas.
So, we listened to what our clients needed in order to help us navigate into providing other solutions.
But as we grew our offerings, we realised we bit off more than we could chew. One of the failures we had was trying to take on an ERP (enterprise resource planning) solution which manages a company’s business process from start to end. Unfortunately, our skills set wasn’t enough to deploy ERP solutions, so we had to scale back.
However, when we expanded into marketing automation, we were able to do so successfully. We could make this successful transition because of marketing automation.
This process – to help generate better quality leads – was a key thing in the market then.
So, yes you need to expand to meet the evolving needs of the market but you’ve got to do that with a good understanding of your strengths and weaknesses.
So how do you keep track of market needs? Most large companies tend to have a stagnant response towards an evolving market and end up losing out.New ideas are born to displace the old and disrupt businesses.
In a nutshell, it is the whole idea of a capitalistic marketplace. To avoid being disrupted out of business, you can do either one of these two things – adapt with the marketplace or acquire businesses that are disrupting you.
Verify your assumptions
Some of the mistakes start-ups make as they transition into their next phase is having unfounded enthusiasm. It’s good to be enthusiastic and it’s important that you believe in yourself but not too much as this can be a big problem – in itself.
You’ll meet people who’ll say, “yes, I need this app” but once you’ve created the solution, you might find that no one else needs it or is willing to pay for it.
So, check your assumptions regularly against the market, with your customers and importantly with your employees as well. Suggest what the company can do differently and how to do it.
Keep pushing for solutions and keep challenging the status quo. Practise an open culture by encouraging your company to do self-criticism every now and then.
If – as an individual – you can’t handle criticism or take feedback that’s harsh, then you’re not going to have a culture that’s adaptive.
One way to go about this in an efficient manner is to conduct an anonymous 360-degree review. This will allow anyone to say anything about your work style and ideas, as well as that of your peers, subordinates or superiors.
Setting the tone
To create a proper structure without killing the enthusiasm and creativity of the company, it is important for business leaders to set the tone of the company culture.
Conscious culture-building is important regardless of your company size because it lets you keep an eye on what your company is about. So, if you want to be innovative, the individual at the top needs to lead innovatively.
Andrew Thomas has 22 years of experience as an engineer and is an expert in technical solutions, strategy, business processes and operations. He has worked with AT&T, Lucent Technologies, and was country manager with Alan Dick & Company (Malaysia) before acquiring it. He is also the co-founder and executive director of Lava Protocols, a cloud solutions provider of technologies such as Salesforce.com and Google. Share your thoughts by emailing firstname.lastname@example.org.