3 New Rules to Follow When Your Startup Starts to Grow

One thing that makes startups tricky to manage is not because they often fail but rather because they can grow and succeed. Startups that find product-market fit tend to grow and grow quickly. But when a startup starts to grow, it’s no longer the same company anymore, which means new rules apply. Unfortunately, founders are sometimes slow to recognize this.

There was one startup I worked with years ago that grew so fast it hired over 200 people in just two years. That sounds like a wonderful success story. But in speaking with the founder, he was shocked that every aspect of the business worked slower with more people. Of course, this was the case because he wasn’t following the new rules that apply when a startup begins to grow.

This particular founder made the mistake of managing the company as if there were still just 20 employees and not 200. Even with over 200 people, everything was going through the founder. He was present for every meeting and seemed to be the only person who was thinking. Everyone else - all 200 people - were only there to execute his ideas.

When you scale from 20 people to 100 people - or possibly 200 people - changes have to be made. To reiterate, it’s not the same company anymore. It’s not a scrappy, agile startup anymore, and you can’t treat it like one. For this particular founder, I gave him three new rules to follow that can also be applied to other startups that have quickly made the transition from a 20-person company to a 100-plus-person company.

The first rule was to step back and not be in every meeting. I can’t even fathom how tedious and time-consuming it must have been to be present for every single meeting in a company of 200 people. More importantly, it’s not an efficient use of a founder’s time and the peak level of needless micromanaging.

The second rule for the founder was to set only high-level goals and only give goals to those who report directly to him. This can be tough for founders who were there at the beginning and are accustomed to being in the weeds. But when growth reaches 100 or 200 employees, founders need to get out of the weeds and focus on the big picture. Likewise, they should only be worried about the department leaders who report directly to them. Those leaders can worry about everyone else below them.

The third rule I gave this founder was to evaluate those direct reports based on their ability to meet the goals that had been set. When a startup has achieved significant growth, setting high-level goals and evaluating whether those goals have been met becomes a top priority for the founder. This still puts the founder in control while also giving everyone else room to think.

It’ll be impossible for a startup to scale and function effectively without the founder stepping back and giving others room to think. This is at the heart of the new rules to follow during and after a period of growth. Without these new rules, a startup may grow, but it will also remain woefully inefficient and likely stall out on its path to unicorn status.

Roland Siebelink brings with him the experience of being a part of three successful startup journeys and helping over 50 founders on their journeys. He understands what startups and their founders need to do to reach their goals.

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