Retaining your startup’s authenticity while scaling

As startups grow, they begin to encounter tradeoffs between scaling and retaining the authenticity which contributed to their success so far. This tradeoff can express itself in many forms. For example, a startup may have the opportunity to scale faster by automating manual processes. While this increases output and efficiency, it often comes at the cost of difficult layoffs. Another example is when a startup grows beyond its core team. The addition of new team members makes it increasingly difficult to rely on informal dialogues for decision making. Successful coordination requires the creation of operating units and hierarchies. Employees who thrived in an informal setting can find it difficult to adjust to the more formal structure and processes required to drive future growth.

Change is a constant for startups, so entrepreneurs should embrace these transitions as a natural part of their startup’s growth path. However, they should be careful to balance these requirements for growth with an equal sensitivity for the startup’s traditional way of doing things. The startup’s authentic culture which has made it a fun place to work for the team behind the startup’s success should remain intact.

If founding team members traditionally take long walks to reflect and debate before finalizing important decisions, they should share this unique approach to decision making with their direct reports once they are executives in the larger organization. If they usually take time off early in the evening to have dinner with their family or exercise before returning to work, they should give this same option to their future employees. If they need to replace early team members who were crucial to the startup’s initial successes but no longer fit the pieces of the puzzle because their role can be automated or they work better in small team settings, they should fairly reward these employees through accelerated vesting of their stock options. If they would gather at the local pub on Friday nights, they should extend the same invitation to their new employees.

These are just a few examples of how entrepreneurs can preserve the traditional culture of their startup while taking the at times painful decisions which are necessary to grow. Just as individuals benefit from staying grounded, growing startups benefit from preserving the distinct characteristics which have made them a great place to work for the founders. When transferred to new employees, the authenticity which contributed to the success of the founding team can also facilitate the success of the new larger organization.