6 things that are highly underrated at fast-growing companies
I was chatting with someone the other day about the challenges startups face as they scale rapidly. As we went back and forth, I realized that a lot of challenges were quite obvious but when you’re in the thick of things and you’re surrounded by fires, these things seem trivial and thus don’t get the needed attention. However, from my experience, these are highly underrated and while they are not a magic bullet (nothing is) to solve problems overnight, they create the foundation so that you can deal with bigger challenges. Let me be clear — at a startup, the problems never end. But if you’re doing the right things, you’ll be faced with bigger problems, the solutions to which can create a bigger impact. But you need to solve the basic ones to get to the big ones.
I was fortunate to be a part of a company that scaled rapidly — I joined when we were around 100 people and we grew to about 900 people in just over 2 years. So this is based on my experience and from my conversations with people who have been on similar journeys. This is not an exhaustive list by any means of imagination.
So here it is. 6 things that are highly underrated at fast scaling companies.
1. Internal Communication
As the company scales and more people join, it gets exponentially harder to ensure everyone is on the same page and moving in the same direction. You no longer have the same environment as before — where everyone knows each other and you’re bumping into people regularly. In a remote-first world, this challenge creeps in way earlier. I won’t dive into the challenges of people not being on the same page, but in short, that creates one of 2 outcomes — too many rules and red tape or total chaos. Thinking about an internal communication strategy and building that out as a function is super important. This is also a way to preserve the “tribal knowledge” of the organization which can be accessed later. Internal Podcasts and wikis (Confluence, Notion) are great ways to solve this.
2. Robust Systems
Once you have a product or solution which works, you’re now ready to grow. You’ve probably managed to raise some capital too. The obvious next step is to go and find as many customers to sell to. You also hire more people. However, one thing we skip is building robust operations and systems. Moving from a “hacky” and “get shit done” mindset to a one of “reliability” and “consistency” is critical. There’s no doubt about your solution working, but can you deliver it at scale? It’s no longer possible for one person to do everything and here is where great systems, especially when it comes to operations can really make a difference. Technology can play a big role here but since engineering bandwidth is precious, it’s probably not wise to direct scarce engineering bandwidth towards this at the very start. No code tools can play a massive role here.
3. Training
There’s always more work to be done. A common belief is that more people will help solve the problem. Well, it’s not that straightforward. Lack of tribal knowledge and systems means that the learning curve for a new employee is steep. Additionally, the cost of a bad hire is very high. So in most cases, the people you hire can only start adding value 3–6 months later, and in the world of fast-growing startups, that’s too slow. This can be solved by training existing teams to do more and faster.
Say you had 100 people out of which 70 are working on a job which has some element of manual work (Customer Care, Finance, Performance Marketing, Operations, etc), and these jobs scale with the company (unlike technology, leadership, etc). Now if your company grows 2X every year, you probably need to hire 70 people every year. Over 5 years, that 350 more people. But if you could train everyone to be 20% more efficient every year, you would only need to hire 175 people, which is half the amount! Along the way, you reduce the risk of bad hires as well ensure that people are growing and increases employee retention — which further reduces the cost of hiring talent
4. Support Functions
Finance, Legal, HR — when these 3 departments work well, it saves you a lot of pain. These activities don’t have a direct impact on the business, and thus often get ignored, but they lay a critical foundation. There are areas where you want to fail fast, but you’re better off not “failing” on these because the costs are higher. Implementing changes in these departments takes time to bear results, so it’s best not to wait for things to break before paying attention to it.
5. Collecting Data
Most organizations aren’t data-driven because they don’t collect data in the first place. Building out Business Intelligence and having a strong data-backed decision-making process is the eventual goal, and most companies eventually get there. But a lot of the data in the early days gets lost, which creates a challenge especially when you want to show that something is working consistently. Most things of value take time and being able to observe things over a large sample of time leads to better decision making, free of impulse and knee-jerk reactions. But if the data isn’t even collected, there’s nothing to draw insights from. Collecting data, even if it is done in an inefficient manner is super important and provides the fuel for detailed analytics later.
6. Org Design
When someone looks at your org, they should be able to understand what the company does, what’s most important, and who does what. An org structure that can’t do this is likely to create all kinds of problems down the line. Making changes in the org — reducing layers, merging departments, etc — is easier done when the org is small and gets exponentially harder as the org grows. Being very deliberate about the design of the org, ensuring the right reporting lines and layers, etc. can really save a lot of pains later
We all know that we need to use oil to grease the chain of a bicycle to make sure it runs well and is fast. You can get the fancy tires and frame, but you also need the not-so-sexy oil, without which you run the risk of chain snapping. It’s the same with the things I’ve listed above. Just like chain oil, it’s unsexy and cheap, but you need to pay attention to them. While they can be ignored in the short run, you run the risk of your chain snapping right when as you’re reaching break-out velocity.
To take an analogy one step further, when you’re a larger organization, you already have some momentum. So when the chain does snap, you wouldn’t know immediately and when you finally come to a standstill, it’s already too late. To end here’s a great quote my coach told me once, which fits in well here
“You need to slow down to speed up”
If you find yourself facing some of these challenges and would like to talk about them, feel free to reach out. While I don’t promise an answer, I can share my experience on what worked and what didn’t for me.
