Everyone doing everything is exactly what you don’t want in a larger organization. You need structure, you need dedicated teams for CX, product, development, QA, etc.
Often early employees perceive the decrease in scope as a demotion. They’re no longer defining the product, they’re no longer helping land the sale, at least not directly. For some that’s a hard pill to swallow and they resent it. Managing these so they can grow within the organization can be the right path, or not depending on the person.
Some people have 5 years of experience and some people have 1 year of experience 5 times.
Thus I'd give the previous poster some leeway too, and read their (but also your message) as: there is an implied basis of skill and value you expect early employees to continue bringing to the table, but when that is satisfied, reward their loyalty too (either with promotions or money or status or stock or...).
Instead, reward them economically. Everytime the company takes a leap forward, make clear to them that they were important for the process, and share some profit.
And make clear that being important in a moment doesn't automatically mean they will be important in the future: they will have to compete on results, like everyone else.
Part of this is communication overheads, and as op points out, the need, and ability, to specialise in a larger organisation.
Early stage you want the generalists who can do everything, move fast and probably break things.
There's an inflection point where you want to stop breaking things and for that you need specialists. Experts in scaling, security, optimisation and code purists.
Finding new roles for your generalists at this point could be hard, even harder will be having to let them go. It's possibly something you should consider at the start and give them the ability to vest and leave for a new greenfield. Alternatively find them a role as an architect/lead where it's their responsibility to be across everything and able to bridge between teams because they have your domain and institutional knowledge.
"Expert" management was brought in who didn't know the industry and didn't know the company and didn't respect the people who were there, who had been eating their own dog food for years. I saw so many stupid decisions being made; I was sidelined and ignored. And then, the corporate bullshit started creeping in where management were lying to their own employees. So, yes, if my opinion stops mattering, it is an unjustified demotion, especially when the layers of management brought in over me clearly don't know WTF they are doing.
Every new recruit brings their own assumptions about how organizations / employment / etc. work and many of those assumptions won't be visible until after a while. This is especially true for managers.
I found Charles Handy's thinking about four types of organisational culture very helpful and I wish I'd found it earlier in the process.
AI summary: Charles Handy identified four types of organizational cultures: Power Culture, where decision-making is centralized among a few; Role Culture, which is based on defined roles and responsibilities; Task Culture, focused on teamwork to achieve specific goals; and Person Culture, where individual interests take precedence over the organization.
Basically, 15>50 is very likely to involve a shift from one of these to another one and making that open and explicit could help you a lot (including understanding how the role of senior managers needs to change).
The book is Understanding Organisations from 1976 but still valuable.
Good luck!
1. As sloaken said, your documentation of processes and procedures is NOT adequate. This applies to everything. From your code commit process to how to book vacation days. Document everything early. Notion is your friend.
2. Like it or not, your work culture is going to change. New people obviously means new personalities but it also means new ways of working, some good, some bad. It really is worth spending some time with the first 15 people that helped get your company to where it is today and define some operating principles (otherwise known as 'company values'). This blog post (not mine) is an incredible insight into why this stuff actually matters at your stage of growth: https://lowercaseopinions.com/post/useful-values
3. Hiring gets expensive and laborious. You're reaching a point where it just isn't practical for you to be involved in every hiring decision. That being said, don't let go of it until you are confident that everyone involved in hiring for your company is aligned on what 'good' looks like both in terms of candidates and hiring process.
4. More people means more individual questions, problems, and ultimately admin. More people getting paid means more payroll issues and questions and adjustments. More people interacting with each other means more disagreements, arguments, and issues. Someone needs to be able to handle all of these issues. Usually the challenges are distributed across different teams but again, without some rigour around how you want your company to approach these issues means that different managers/teams will take different approaches which in turn will amplify the problems rather than solve them.
5. Reconsider the financial impact of hiring experienced people. Bringing in strong leaders early can enormously mitigate the operational costs of scaling. Hiring a highly experienced person at your stage will have a big impact on your budget but long-term, that investment will pay dividends both in terms of the quality of work but also in sharing the burden of handling these scaling challenges.
Agreed. In my experience that's almost always a bad idea if that L8 hasn't previously had first-hand experience of working at a very early stage company and understands the enormous difference between the two environments.
Your documentation of processes and procedures is NOT adequate.
'everyone used to know about are getting lost' - oh good thing your documentation makes this clear, because it is obviously their fault.
'New hires take forever to ramp up' - oh good thing you have complete ramp up plan and documentation, because it is obviously their fault.
'building on different assumptions' - oh good, your old assumptions are clearly documented, because it is obviously their fault.
So their is your self focus, please do good, and document well.
Any given day someone can win the lottery, inherit a lot of money, or need to leave for some other reason.
Every complaint they had was a direct effect of failure to document. Well that or the other people are just complete idiots ... you decide.
Giving people additional documented responsibilities helps. Lucy is responsible for API docs and swagger up to date and for building that out as business needs. Varun is responsible for coding practices docs. And so on. If something is out of date they update it. Use Confluence or Notion or something else good.
And to read everything. And to find it.
I find documentation is often meaningless or worse -- in networks you find people documenting IP addresses on static pages like confluence pages or powerpoint presentations. That isn't important. Sure it should be in a single source of truth -- emphasis on the single -- but if isn't, it's not the end of the world.
A new employee can see that router 1 is connected to router 2 by looking at the config. What they can't do is tell you why its connected. And why the route filters are the way they are. The how is easy to reverse engineer, but documentation should start with the why. Anyone changing something can then make an informed decision about whether the new solution still meets the why, or if the why isn't relevant any more.
Why are we using this architecture, why are we using an ec2 vs lambdas (or vice versa), why are we putting this infront of cloudfront and this direct, why is this in us-east-2 and this in eu-west-1.
A quick look at the teraform, or even manual things like "ec2 describe instances" tells you what's deployed, what the IP addresses are, what vpcs are connected.
It doesn't tell you why, that's where documentation comes in.
Documentation has to be done once. (Well, it has to keep being updated. But for any change, the documentation only needs updated once.) But new people need to know about it over and over, because as you grow, you keep getting new people. You don't have time for each new person to have to go exploring to find the answer to each question. It's far less time to have one experienced person write down the answer... if you have each new person read all the relevant documents, and if you have people update the documents every time anything changes.
The last point is important. It has to become part of the culture. It should also become part of the code review/commit process.
At my last job, I was on the wrong end of this. Much of the initial code was written by two people. One was now a director; the other was incredibly busy. The code was extremely object oriented, to the point that it was very hard to figure out where anything happened and therefore where changes should be made. The documentation was a number of UML diagrams.
The result was that new people (including yours truly) wasted huge amounts of time trying to find their way around in the code. Even after being there for three years (and with over 35 years of experience), I still found the code very hard to work with.
What that code needed was someone (one particular someone) to take a solid month and work on writing good beginner-to-intermediate documentation for the code base. It would have saved literally man-years of time for new people.
Business. If the customer can’t feel it it doesn’t exist.
Ops. If it isn’t automated it doesn’t exist.
Product. If it isn’t documented it doesn’t exist.
Engineering. If it isn’t in code it doesn’t exist.
You have an opinion about security? Have you written a linter? Is it documented? Is it in the deployment pipeline? Do customers care?
If it’s only in your brain I don’t accept it and refer you back to the existence rules.
As you get larger you see what you're seeing - not everyone is in on the meetings, knowledge in one person's head isn't shared and people don't know who to ask.
I worked on a simple barcode database setup years ago. Originally it was just a spreadsheet one person 'owned'. Then I made it into a webapp that I and original owner could both add items to - enforcing unique entries and validating checksums (plus an API I could querry). More process, but still a lot was in our heads. When a 3rd person started using it, they added something in lower-case (we always wrote refs in caps) and a variety of case sensitive bugs were found. I had to fix the DB manually and started adding hints and validation.
The more people you have using something the more problems you will have and the less feasible it is to walk everyone through the system in person!
Documentation, make process, make efforts to share knowledge. No way around it.
We gave up on documenting the environment and just made it cloneable. Snapshot a working setup, hand it over, done. First-commit time went from ~2 weeks to a day. (fwiw I work on https://cyqle.in partly because of this)
The first is that you had a system with a given set of ownership and now lines need to be drawn between groups to grant each sub-team their own piece of the larger pie. This is where Conway's law comes to bite you because your code is likely structured around your existing team and practices. Deciding how to draw that boundary is a challenge (API-based? Separate services?). Do not skip this part, otherwise you'll have an awful mix of old and new and everyone suffers.
The second is how work is structured. With a small team, anyone can edit anything (ownership again). With multiple teams you need to accept that changes will require multiple stages of development and the rate of change can take a hit due to scheduling and prioritisation for each team. In the small team a single sprint (assuming this is your working practice) may have been sufficient, but with multiple teams those changes will need scheduling.
As you grow, that stops being the case; to echo what @Peroni and @sloaken said - a good first step is good documentation and clear, repeatable and where possible automated processes. A second, related challenge is company culture - as you grow and interactions between each & every individual become less & less possible, getting everyone aligned on what it means to work at your company (and how to achieve company goals) is harder. You'll need to make a conscious effort to maintain that (see below).
The core team will need to start delegating more, which can be a hard if you're not used to it (some may also want to remain ICs), and will change the shape of your organisation. This is particularly hard to do gradually, as you'll need to work out the right point at which to transition different areas of the business. This comes with the risk of silos developing - a good way to work around that at mid-size is to continue arranging teams by project, but make sure that there are both opportunities to gather across functions (e.g. dev, qa, project management etc.) and more widely (e.g. company events, social events etc.). The main thing here is making sure people talk to each other, exchange information, getting good at collaborating with each other and know who to reach out to in case of issue. Again, you are going to have to dedicate time to this which will seem strange coming from 15 people (but will pay off handsomely in increased efficiency).
There are many good other points in this thread (on hiring experienced people even though they cost more, the importance of good hiring, clear ownership, us vs them), but a last one is the need more generally for the leadership team to adapt. They will have less visibility and control; the company will become less efficient which might be frustrating (it will still be able to do more overall); changes of direction will become harder and slower. This applies to all 15 people working there now, but particularly for the founders/leaders. Having some thoughts on how to handle this ahead of time (established reporting structures, clear goals and reporting metrics) will help minimise growing pains. It's always easier to say this than to do of course.
Source: did something similar a couple of times (4->25 people, 600->1000 people).
The only solution I can come up with is something approximating a benevolent dictator model where the person at the top tries to remain as curious as possible about the details in their business, but is otherwise god when it comes time to make decisions. Allowing leadership to become diffuse through committees and boards of directors is where most companies go to die.
Keeping the head count small as a primary defense measure is probably the simplest thing. If you aren't comfortable with the idea of a CTO, CIO and CEO being 3 different people, then you should keep it in the low double digits. It might be better to create a wholly separate company than to grow the existing one. Outsourcing doesn't necessarily mean to another party you've never interacted with before.
Once this dynamic takes root, it’s much harder to stomp out. I’d be more worried about systemic issues like this than the short term pain from growth.
1) ~7 people. This is when each member cannot participate in the whole context and all important decisions. "2 pizza teams", limits of the working memory. Decisions cannot be done all together anymore. This results in hierarchies forming and people worrying about their positions in them.
2) ~150 people (Dunbar's number). This is when group members cannot all know each other anymore and have meaningful relationships. Max sizes of family-based tribes, an important unit size in the army. This results in inability to observe each other's actions well, so understanding who contributes a lot vs not shifts to indirect stories. Group members start building narratives instead of demonstrating contributions directly.
In a team of 15, you have 15 x (15 - 1) / 2 = 105 communication channels
Which implies that the time you need to spend communicating would be around double. So if you need 1 hour meeting per day in a 10 person team, you will need 2 hours of meetings in a 15 person team.
The only solution that I know, however impopular, is to form a hierarchy of information, just like you would organize a growing code base in a hierarchy of abstractions.
At 50 it start showing signs of stress as people that knew everything no longer do so. High performers suffer and start feeling left out, because they lose some autonomy.
It particularly impact those whose scope narrows and they liked the broad scope. Those types thrive in startups, but suffer as more structure is added.
Make sure they are fully utilized and don't get bored or you'll lose them, they like to pick what's important for them to work on.
- It also matters at what PMF quality stage you are, like we were at a weak PMF when we started scaling from roughly 12 to 25.. and i hired leaders who used to report to me. So i lost touch with people on field. ( I should have kept things flat)
- Hired too many managers instead of IC.
- Focussed more on growth v/s retention
* Ownership: "this is my project and nobody touches it without me"
* Too many meetings: This happens even with small teams. Hours wasted for nothing
* Hiring people very good at telling history rather than having actual skills
Put them all together and you have the perfect storm.
Adding culturally non-fit team members
Setting process and system to accelerate the speed of execution not to slow down
Finding the harmony with process and speed
Finding the harmony with quality and quantity
My book suggestion is "The One Minute Manager" for team management
Reinforcing Vision and Mission statement of why your startup exists
I found a mixture of shoehorning the vision into as many conversations as possible and occasional in person meetups (we die roughly yearly) helped with vision. I dont have measurements but my concern for teams decision making dropped a lot and disagreements in smaller discussion settings also dropped.
Standards dropping was secretly alignment too but more around why than what. I found building a culture of excellence helped e.g. "we're here to build software we're proud of, from the code to the experience, and you are the right people do it, so lets build something we're proud of.". You or who ever has to actually believe they are the people to so it though.
Im sure people have more concrete and technical examples.
Try and identify what is the weakest link, then avoid over correcting a symptom, double down on communication and ensure that your values, principles, and alignment are well understood across the org.
I really like 37signals as a reference guideline, build your variation of that and talk about it every day[1]
"We just talk to each other" doesn't work well enough when you no longer know who to talk to. Email aliases for teams can help, so that you don't need to know who the right person is for your question, you just need to know the right team.
Things can't live in peoples' heads anymore. Task lists need to live somewhere. Tribal knowledge needs to live somewhere. Priorities need to live somewhere. Some tools may help. You probably eventually will need a bug database. Depending on what world you're in, you may need a requirements database.
You will need more structure than you had before. For instance at 15 the idea of managers is silly, everyone still needs to be contributing individually, the only thing is that you do need to minimally subdivide work so that everyone isn't doing everything. Be wary of process for processes sake, you will start to need some but you really want to stay focused on concrete progress; is everyone doing the most important thing possible at every given moment? How fast are you shipping changes, closing sales, etc? Also make sure you have the right people, don't get starstruck by big tech vets. They have many skills that will be useful—if you are phenomenally successful—but if they don't have startup experience they likely will overengineer things by default, and a significant percentage of them can not wipe their own ass without the best-in-class tooling and infra support teams that allowed them to focus purely on one domain at BigCo. Basically you need pragmatic hustlers, veterans are good so long as they aren't cathedral or empire builders. Also watch out for weird team dynamics and nip any toxic interactions in the bud, one bad apple really can spoil the barrel; that's probably the most important thing to watch out for in the 15-100 range.
If someone is doing a task which takes 4 hours a week, in a team of 10, on scaling to 50 it likely becomes a half FTE level work. Not everything scales that way, obviously, but it's a good way to model new roles needed.
It’s up to the CEO to fix all of it, directly or indirectly. Except perhaps the chat one. You need someone with community-manager DNA and a light touch, lest the CEO come off as control freak. (Which is ironic bc they have to be one in many areas but this is one where it will alienate people)
Arguably it can be two people, but buddy cop movies are popular precisely because of how dysfunctional this can be.
Eventually, things went better when they found the right persons to help with the organization, but it was chaotic and frustrating for a while.
- Are you hiring senior people or juniors?
- How good are the managers?
- Are you able to get people to buy in on the need for consistency?
- Are you micro-managing it or are you delegating?
Usually the problems start at the top, so that's where I would start looking for solutions. A really good coach for your CTO if they're not very experienced would be a nice start.
*code = code, design, discuss code, write tickets, test etc. i.e. get the shit done on the plan
You may need to transition to making willingness and ability to do that (i.e. be an owner) a hiring criteria and performance criteria.
You're in the hardest phase - 15 until about 60 people. Right now, you are transitioning from needing generalists to needing to hire specialists, but you don't have the infrastructure for specialists. You are likely to start hiring managers now.
Compounding the difficulty, people are going to expect all the services of a 60 person company but you haven't built them, and probably don't know exactly what you want. Have you started getting requests for "HR" to do something yet? Requests for "policies"? In the thread here, people mention documentation. This will be a theme. And your vision for what you want that to look like is important; in my experience if you leave this up to a new hire that's "bigger company" experienced - they will generally rebuild what they have experienced without a lot of thought about adapting it to your company and the size you're at.
Like a lot of startup problems, a) this is a good problem, so don't be mad, and b) there is no magic bullet, you just have to get through it.
My two cents, having mentored a number of companies through this and done it a few times myself, here are my non-negotiables:
1. Keep hiring managers that can execute. It's too early for corporate VP types at your size. And you're probably not ready to manage the political and management skills and needs of corporate VPs just yet.
2. Double down on engaging with hiring - you're likely to be hiring new people with organizational leverage (managers) - you need to be able to explicate the values and make CERTAIN they are being carried out and improved on and broadcast by new management hires; they will be doing things you don't know anything about, so you need to be totally in sync with them. I've read a few startup CEOs that say they stayed personally involved in their first 1,000 hires. That sounds incredible to me, but I like the aspiration.
3. Build reporting process - could be digital could be soft, e.g. periodic standup meetings where numbers are reported - but you're going to need this as you get a bit bigger, and it's culturally easier if it's embedded in the org as you recruit and hire and grow than if you impose it as a "founder/CEO project" later on.
Anyway - what breaks first is your old methods of alignment. A lot of people talk documentation here, which makes sense. Culture is more important than docs IMO.
The way I would say it is: communication becomes exponentially more important. Basically every doubling in size means you will need to say things twice as simply and four times as often for them to get through the org. You will need partners in the org as it grows to help with all this, but you will not be able to give up the responsibility of communicating vision, standards, direction, and to the extent you don't build that skill, you'll send an org spinning, or lose it to someone who is doing this.
Enjoy the ride! It will be fun. Also, things do get easier in many ways as you grow - you get some money to invest inside the company - you'll get to work with great people - it's a lot of fun.