The development from startup to scale-up boils down to one key characteristic: leadership.
6 min read
The opinions expressed by the entrepreneur's contributors are their own.
Entrepreneurs and VCs often talk about how the first phase of a company's life cycle can be reduced to a single goal: finding a suitable product market. But what's next? How does a business grow in a positive way from a product that customers are eager to buy or use, into a successful billion dollar business or, better yet, an ongoing franchise? Based on my experience as a former operator who helped found and run several companies within Google and now, as a VC, focuses exclusively on companies in the growth phase, I can clearly answer that the development from start to scale boils down to a key feature : Leadership.
Related: How the Average Person Can Actually Start an Online Business (and Scale It into Something Real)
Here are battle-hardened leadership lessons for growth:
1. Prioritize ten-fold recruitment, especially among executives
When I started managing, I was grateful for every team member who was pretty good. Pretty good reports have certainly brought more value than I could alone. But then I made incredible adjustments and my perspective changed completely. These stars showed me what excellence looks like. Professional circles often discuss the 10-fold attitude, the employee, whose contributions are ten times the typical employees. Too seldom do these discussions extend to business and management roles where the impact is just as dramatic. That is, never sacrifice team cohesion for a single attitude, no matter how much, if you believe the person will create discord.
Business Hack: When you're applying for a new role, especially in an area outside of your core competency, look for the absolute best in the world you can find. Sure, you may not be able to hire many or some of them, but chances are at least some of them will speak to you. Think of this as an informational interview, except in reverse order. Let them show you what excellence is and write your job description based on what you are learning.
2. Do the math
I had to hire 150 people once in three months. A few weeks later, it felt like nothing was being done. The reason: nothing was done. I asked my team why and they told me to do the recruiting math. Sure enough, I've whiteboarded their assignments and found that everyone has to work 12-hour days for the next three months – with no time for their "day jobs" that run the business. Since then, I've always encouraged CEOs to do their recruiting math before setting any recruiting goals. Growing CEOs typically spend 10 to 25 percent of their time recruiting. Balance and careful consideration are key; Teams need to devote enough time to recruiting to meet their key needs, but not so much that they lose focus on the business.
Business hack: Make the most critical adjustments to a planned cadence, such as hiring a new VP of Engineering this quarter but moving the new marketing director to the next quarter. This prevents overburdening of recruiting, a common cause of executive burnout.
3. Throw new employees into the fire (always with water on hand)
I've seen too many companies successfully hiring incredible people to take the next step. When you scale quickly, onboarding becomes critical to all major business functions. Someone has to dedicate themselves to this – often full-time.
Related: A Breakdown of All of the Major Social Media Platforms for Business Owners
Connect new employees culturally and emotionally with the company. Best practices include buddy and mentoring programs, creative Schwag (watermelon, anyone?), Cross-functional team building activities, and coffee (initially virtual) with the leadership team. Onboarding must also include a carefully planned transfer of information. Managers should create and centralize critical documents and introduce new employees to all stakeholders across the company.
Business hack: Sales teams usually have the most sophisticated onboarding processes in place, including frequent experience training, e.g. B. Practice conversations followed by real-time feedback. That means throwing them into the fire – but not too quickly, because helpful coaching is also the key. Newer teams can borrow onboarding practices from the teams with set programs and make adjustments as needed. Remember that onboarding extends beyond the first week. Check in with employees regularly after they've dealt with their new roles.
4. Customer obsession never goes out of style
Big companies, whether startups or $ 100 billion brands, are obsessed with their customers. Strong leaders are constantly speaking directly to customers, listening to sales and support calls, and soliciting feedback from their customer-facing teams. They get engaged as they develop brand new products and they stay engaged as their products mature. And customer obsession cannot be limited to the C-suite. it has to permeate the entire company.
Daniel Dines of UiPath, a fast growing company, focuses on frequent flyer records by traveling the globe to meet with customers and sell them based on his technical vision. Luis von Ahn of the popular language learning app Duolingo relies on extensive A / B tests to receive feedback from millions of customers simultaneously in a rigorous, data-driven manner. Both approaches work great and both CEOs have successfully brought customer obsession into their company's DNA.
Business Hack: Ask engineers and product managers to regularly listen to sales and customer support calls. This creates cross-functional empathy and unites the company around a common goal of customer success.
5. Don't grow too early (bonus tip!)
If you haven't really gotten to product / market customization, scaling too early – and burning through all of your hard-earned capital – is a surefire way to scale your business right into the ground. Timing is everything.
Related: 33 Inspirational Quotes On Realizing Your Dreams As An Entrepreneur
There is an old saying that leaders are born and not made. In my experience, I've found that the greatest leaders make themselves. Not ready to rest on their laurels, they are voraciously learning in a constant search to help their companies reach their potential. Now is your time to study. Go out and scale.