How do successful startup founders scale their corporations in the early days of hectic, rapid growth, going from zero to 1,000 employees?
To answer this query and offer startup founders guidance on methods to grow their company during this turbulent early period, enterprise firm Index ventures tracked 210 start-ups that reached the level of employing the first 1,000 employees.
The insights obtained in this fashion have been included in a latest book “Scaling through chaos”, released on Monday. The company simultaneously releases an app called Team Plan that founders can use to seek out guidance on every part from methods to scale an engineering team to when to rent a CFO.
Before the book’s release, we talked to Marcin Mignota partner at Index who moved from Europe to establish the firm’s New York office, and Dominik JacquessonVice President of Talent at Index.
“It’s very, very difficult for these fast-growing companies,” Jacquesson said. “There are a lot of changes.”
Hiring is key
Index found that the No. 1 query founders ask is: “Who should I hire next? On what level? What function? How to organize a team?”
Once they are hired, the query becomes: “How do we build culture? How to continually raise the bar and adapt your team to the next phase of development? – said Mignot.
The company also found that as it scales from zero to 1,000 employees, founders will spend about half of their time on people-related issues.
“At the beginning, a lot depends on employment. And as the team grows and there are more managers, it will become more and more important to adapt them to the needs,” Mignot said.
The book also prepares founders for changes in the initial team and the need to accumulate experienced members over time. The idea is to build a “competence over loyalty” mindset.
“Growing as a leader is a lot about running toward difficult conversations rather than away from them,” Mignot said.
Changes in the founding team
Index also found that for a startup with 10 founding team members, by the time it grows to 1,000 employees, there are often only two or three members left from the founding team.
However, the founder-CEO was still in his position in 85% of corporations that reached 1,000 employees.
While a technical co-founder is critical to success, the percentage was much lower for a CTO co-founder. In this case, only about 24% remained at the 1,000 worker level.
Beginners vs. experienced founders
The index found that first-time founders make different mistakes than more experienced founders.
“If you are a first-time founder, you need to aim much higher – beyond your immediate network – to bring in more experienced people who can help mentor, nurture and develop younger team members,” said Jacquesson. “But repeat founders can run into a problem: They only hire from their small network, from their small pool, and then they create a sort of monoculture, and as they scale up, it becomes a them-versus-us situation.” ”