Speed is everything at a Startup

Startups move in overlapping stages. Often the stages are described in employee number or funding rounds, but I think they should best be thought of in terms of speed. Speed at a startup is a function of decision making. The more people involved in a decision, the slower things go. A breakdown (team size in brackets):

Founders (1-3)

When it is just the cofounders everything should be lightning fast. You will NEVER move so fast as at this stage and so you should do everything in your power to get as much of a headstart as possible. Founders must be people super comfortable making decisions and executing quickly. Decision making should be minutes (ideally seconds) and major progress made weekly.

Early Team (3-10)

You make your first few hires. Things slow down dramatically. You may produce more stuff, but each unit of production is slower. It is essential to hire people who like building things and are comfortable making decisions. The pressure to ship cannot let up here as this is a really important stage in the company culture. Decision making should be daily and major progress made every couple of weeks.

Expanded Team (10-30)

Terrifying stage. Not everyone can report to the founders so bureaucracy emerges with middle managers. You start to have proto departments, maybe even single person departments. Decision making becomes confusing and either too much is lumped at the founder level (so slow!) or disaggregated and a sense of no one knows what anyone else is working on emerges. Things can grind to a halt, no one knows really what to do about it. How do you stop things completely stalling? Do not divide departments by function! You are small enough where you can make mini-early teams of cross functional skillsets solving specific problems with specific KPIs. You start to have a divide emerge between people comfortable as “deciders” and others prefer to be “executers” which may or may not align with the actual manager<>direct report structure (correct this if it does not!). Decision making should be weekly and major progress made monthly.

Departments Emerge (30-100s)

Departments now make sense, a suitable (off the shelf) management structure can be applied. Decision making becomes more hierarchical and it is honestly OK that you don’t know what everyone else is doing. The company starts becoming more risk averse (can’t lose what we have built!) and that is reflected in hiring that selects for fewer deciders and more people who put their head down and execute on management decisions. The early fast movers get frustrated at the bureaucracy around decisions and start to leave. Decision making should be every couple of weeks and major progress made monthly to quarterly.

Public Scrutiny (100-1000s)

You are now big enough for the world to care about you. If the company makes a mistake, it will be written up and you could lose your biggest clients. Major decisions go several rounds with the executive team and you go over everything 5 times to make sure there are no mistakes. Decision making takes place across a quarter and major progress every 6-18 months.

Alot of startup heartache comes from not understanding where they are in terms of the company stage. If you are 5 people in a room, a second worrying about what the press might think is a wasted second. Similarly, if you build departments too early you will actually slow down decision making without the gains that departments can give you.

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