The culture practiced during the initial stages of a tech startup forms the backbone of its company in later years. But as startups expand, keeping teams aligned and coordinated becomes increasingly challenging mainly because rapid growth takes a toll on the resources or structure of a company which can eventually lead to a complete collapse.
A survey conducted by a tech blog, ArcticStartup, and CoFounder Magazine in which more than 100 entrepreneurs were asked to share their experiences even backs this up. While the growth of a business is incredibly important, it’s also pertinent to stay nimble as the company expands.
The Presence & Absence of Structure
A tech startup is typically responsive and agile with an “everyone does everything” mentality – this is a great practice when you’re operating on a scale that consists of less than 30 people as tasks can be easily coordinated between individuals. But if the same is practiced in an environment with a larger number of employees, this will result in overlapping focus on one task while others get left behind with no one looking into it.
A lot of people unfairly single out structures and processes but they’re necessary as it ensures efficiency when working together. Even a two-man startup has a structure to it; you do half, I do half. The key is to remember that processes are a means to an end and that end is meeting the need of the marketplace.
If you’re adapting to changing needs and this requires a change in process – do it! There is nothing sacrosanct about sticking to old processes and claiming this is how it always has and must be done. Businesses should not turn processes or structures into rigid elements because it kills enthusiasm and ingenuity within a company.
Meeting Market Needs & Finding The Right Skill Set
The requirements when growing a company also differs to an extent for startups that provide products versus those that provide services. For a product company, it’s about always finding a niche that meets a need or solves a problem. A services company on the other hand grows with finding the right type of people.
What’s common to both is funding and one of the main reasons startups fail is because you’re entering unchartered territories and once you get there you find that the problem is bigger than anticipated. The key to overcome this is to find the right mentor through thorough research who can help your company high-step some of these pitfalls that you wouldn’t have the foresight to predict.
Another important aspect that businesses need to practice as they experience growth is to keep up with the evolving market needs because if you don’t meet the needs of the group you are addressing or the market you are addressing, you’ll invariably collapse.
When we started Lava Protocols 10 years ago, the focus was on providing Salesforce CRM (customer relationship management) solutions and at one point we realised that we can’t be a one trick pony and had to expand into other areas. So we listened to what our clients needed to help us navigate into providing other solutions such as Google Apps, Google Maps, etc.
But as we grew our offerings, we realised we bit off more than we could chew. One of the failures we had was trying to take on an ERP (enterprise resource planning) solution which manages a company’s business process from start to end. Unfortunately our skillset wasn’t enough to deploy ERP solutions so we had to scale back.
However, when we expanded into marketing automation, we were able to do so successfully. The reason we were able to make this successful transition was because marketing automation, which is a process to help generate better quality leads is a key thing in the market right now and it is adjacent to CRM which is something we’re very familiar with. So in other words, yes you need to expand to meet the evolving needs of the market but you’ve got to do that with a good understanding of your strengths and weaknesses.
So how do you keep track of market needs? Most large companies tend to have a stagnant response towards an evolving market and end up losing out. This is because new ideas are born to displace the old and disrupt businesses – this in a nutshell is the whole idea of a capitalistic marketplace. To avoid being disrupted out of business, you can do either one of two things – adapt with the marketplace or acquire businesses that are disrupting you.
At Lava Protocols we opted for the prior by venturing into areas that were out of our scope by successfully founding two subsidiaries (Lava Labs and Lava Media) that provided these scopes. These two companies have more of a startup mentality than Lava Protocols because they are relatively younger. This allows them to be a bit more adaptive with a different set of people that have different set of skills to make sure we don’t lose out in the marketplace. But we didn’t make this choice overnight. We were able to make it happen through research and filling in the gap we saw in the market.
Setting The Tone
Some of the mistakes startup companies make as they transition into their next phase is having unfounded enthusiasm. It’s good to be enthusiastic and it’s important that you believe in yourself but not too much as this can be a big problem in itself.
You’ll meet people who’ll say “yes, I need this app” but once you’ve created the solution you might find that no one else needs it or is willing to pay for it. So check your assumptions regularly against the marketplace, with your customers and importantly with your employees as well. Suggest what the company can do differently or do better and how to do it.
Keep pushing for answers, keep pushing for solutions, keep challenging the status quo. Practice an open culture by encouraging your company to do self-criticism now and then. If as an individual you can’t handle criticism or take feedback that’s harsh, you’re not going to have a culture that’s adaptive. One way to go about this in an efficient manner is to conduct a 360 degree review that’s anonymous. This will allow anyone to say anything about your workstyle and ideas as well as that of your peers, subordinates or superiors anonymously.
In order to create a proper structure without killing the enthusiasm and creativity of the company, it’s important for leaders of a business to set the tone of the company culture. Conscious culture building is important regardless of your company size because it lets you keep an eye on what your company is about. So if you want to be innovative, the individual at the top needs to think inventively.
If you would like more details then check out my interview, TV Interview: How To Stay Nimble While Growing.
Lava is an authorised Salesforce Partner, Carto Reseller and Google Partner in Malaysia and has more than 9 years of cloud solutions and consultation experience. We pride ourselves in understanding the needs of our customers and taking their business to the next level.