6 Stages of Startup Scale
Are You Behind on Scaling?
I often hear from CEOs of high growth companies that they need process, operational help, or they feel “behind” on scaling.
Good news: THIS IS TOTALLY NORMAL!
If you’re “ahead,” there’s a good chance you built process before you needed it, overhired, or aren’t growing fast enough.
I’ve seen operational scale and systems at high growth companies of all stages and sizes.
What I’ve learned:
- Every company is unique. Scale and operational needs can differ wildly based on founder personality, industry, product, and customer needs.
- There are common patterns of what things scale and when.
- Even when you’re on track, things feel messy and imperfect.
So, what are the stages of scale and key characteristics?
6 Stages of Operational Scale at Startups
STAGE #1: Wild West
- Everyone reports to the CEO
- “Communication” means turning around in your chair and talking to each other
- Everyone is in every Slack channel
- Job titles? What are those?
##Protip: Many founders look back on this time as one of their favorite phases. It’s hard but incredibly focused. Nothing matters but customers, revenue, and building something people want. Lots of hilarious stories about scrappiness and first-timer mistakes.
STAGE #2: The Basics
- Employee growth from 10 to 50
- Adding one layer: managers or team leads for functional areas
- Intentional communication (Weekly Update Email, All-Hands Meeting)
- V.1 of hiring process, performance management, goal setting
- Wrangling — uh, I mean— bringing consistency to contracts, invoices, and pricing
- Workflows for high priority items like inbound leads
##Protip: Define your Core Values and shore up your culture NOW! It will help in recruiting, hiring, performance management, and faster decision making across the company.
STAGE #3: Departments Grow Up
- Largest teams have 30+ people
- Adding managers of managers including more external hires
- More documentation, process, training, and planning within each department. Examples:
- new sales rep bootcamp
- customer success internal wiki
- engineering team offsite
- Upgrading internal tools or software for more automation, volume, complexity
- Adding “rules of engagement” between departments and playbooks for cross-functional projects like product launches
##Protip Invest in your people. Leadership training and career path discussions are fantastic to implement now. Employees feel empowered and see a future at your company, even if they get a new boss or their day-to-day has changed.
STAGE #4: Big Kid Stuff
- First foray into global expansion, launching a new product, moving up or down market, opening a new office
- Bringing services in-house like legal, IT, facilities management
- Shoring up product and business security, governance, compliance and other things with checklists, paperwork, and lawyers 😉
##Protip Any senior leaders or folks from the early days looking for new challenges? Having trusted people on new initiatives can provide them with “startup-like” work within a larger company. It also ensures company culture is at the forefront and de-risks the people aspect of the new endeavor.
STAGE #5: Operations Everywhere!
- More operations-specific hiring than ever before
- Company-wide understanding of the need and value of operations
- Centralized ops function -OR- each dept will have a dedicated ops role or team
##Protip Who on your current team is organized, analytics-oriented, and loves playbooks and systems? Could they be a fit for a new operations role?
STAGE #6: Repeatable Expansion
- Are you even a startup anymore?!? 😜
- Dedicated teams for new location openings, M&A, new market launches
- You’re thinking about unicorn status, going public, SPACing…and the fun new challenges that come with it!
##Protip Appreciate how many lives you’ve impacted. Hundreds, possibly thousands, of people with jobs, opportunities, life experiences, relationships, and memories, thanks to what you and others have built.
Every Company Is Unique
These stages are an overview but each company is different.
At Pardot, we opened up a London office before we had in-house legal or IT. Some companies make their first acquisition before they’ve hammered out their hiring process. Sometimes Stage #5: Operations Everywhere! happens as part of Stage #3: Departments Grow Up. Or not at all!
What operational stages or journeys have you seen? Do you identify with these? Any key areas to add??