“CEO/founders should interview every candidate until the company is at least 500 employees.” — Keith Rabois
Good news. Your startup has gained some kind of traction and has finally achieved some sort of product-market-fit. You, the founder, are assuming the roles of all the C-suite executives. You are making sales calls, you are having meetings every other day, you are managing the back-end server of your startup and you have no sleep. Don’t fret! Just breathe. These problems are all good problems to have. When you have reached this stage of the startup journey, you are now set to face your next great challenge — scaling your team. It is time to evolve your team from a family to a tribe.
For simplicity’s sake, let us define what a tribe means in startup scaling. For the purpose of this article, we shall define the tribe as your first 100 employees. In this article, I will try to break down the common mistakes of founders and offer some solutions based on the findings I obtained.
Hiring is Key
Let us start with the topic of hiring. Believe it or not, hiring is actually one of the most important tasks for a founder at the tribal stage. According to Sam (YC President), founders should look to spend about a third of their time hiring people. Many founders often overlook this aspect and treat hiring as just a side task for them. Even worse, some founders even justify that outsourcing the hiring process will be just as good as doing it themselves.
Just the same as doing customer discovery during the family stage (1–10 employees), founders should also get down and dirty to conduct the hiring process at the tribal stage (10–100 employees). Since Sam Altman wrote a really good article about hiring, I would not dwell much into the subject but instead recommend everyone to head on to the article to get a good feel on how to hire.
Defining Company Culture
The second thing that a founder should keep track of is defining company culture. Since the startup is the brainchild of the founder, its culture should be defined by the founder too. When hiring, founders should never compromise and only hire people that could potentially fit the company culture.
After hiring, founders should have a set framework on how the company should behave. Personally, I found the framework from Tribal Leadership, written by Dave Logan to explain company culture really well. For a summary, Tribal Leadership defines the 5 stages of company culture that is categorized into:
- Stage 1: Survival mode — employees are there just there to make ends meet.
- Stage 2: Life sucks — employees do not enjoy their work whatsoever and zero innovation takes place.
- Stage 3: I’m great, you suck — employees resent each other and are continuously competing with each other to get promoted.
- Stage 4: We’re all great — employees enjoy their work and have a common enemy like an external competitor.
- Stage 5: Life is great, nothing is impossible — employees are excited about their work and want to create new innovations together.
In short, founders should try to shape their startups to achieve at least a stage 4 or 5 culture. A successful startup at the tribal stage should consist of employees that are excited about their work.
Keeping Focus with Small Teams
When scaling your team, it is important to keep your employees focused on the startup’s mission. The worst thing that could happen is having a large amount of employees but no one is actually doing any substantial work. One solution to this problem is distributing your tribe into smaller work-groups.
It is widely known that startups excel because the team is smaller where bureaucracy is at its minimum. As you scale larger, you want to expand the workforce without sacrificing the quality of work. By separating your team into smaller work-groups and assigning a leader in each group, employees can take more ownership in their work. Allow the smaller work-groups to make decisions on their own, take up projects on their own and only report to the work-group leader. That way, employees have a sense of ownership and responsibility as they are given the authority to make decisions that shapes the company’s growth.
Recap
As a recap, here are some of the things that I think startup founders should focus on when scaling their team into the tribal stage:
- Do not neglect hiring. Founders get down to the ground and be involved in the process.
- Define your company culture from the get go.
- Separate your tribe (100 people) to smaller work-groups (20 people) to provide a sense of ownership.
Happy Scaling!