Essential Lessons for Founders: Scaling Your Startup with the Right People

By now you have heard this a gazillion times: The lore of the lone founder is not only exaggerated but plain wrong. Companies are built by groups of dedicated people, sharing the same vision, believing in the same future, and working toward the same goal. Getting to scale can’t happen without them.

Regardless of how brilliant you or anyone on your team might be individually, with humans the whole is always greater than the sum of the parts. Truly great companies have great people in every position. And truly great leaders focus on enabling their team to be the very best they can be.

Here are three important lessons for finding, approaching, and developing the people who will help you successfully scale your startup.

1. Rethink people

If you have ever worked for a company (or built one) that was big enough to have to organize its people, you will have encountered the Human Resources (HR) department.

It is a pretty weird, backward, and industrial way of thinking—assuming that humans (people) are merely resources. That might have been true during the times when we were focussed on building an efficient and effective industrial organization with an aim to churn out as many gadgets at the lowest cost possible. It surely is not true today. Today the value of most companies is directly related to the people who work there and the work they are empowered to do.

Humans are not a resource, they are the source. They are the source of everything a company does.

As you are growing your company, as you are bringing people into your organization, and as you are managing the people inside of your business, shift your thinking from resource to source. It will fundamentally change the way you think about how to engage with your people, how to empower and support them to do their best work—and it will pay off handsomely in your company’s performance.

2. Avoid The Bozo Explosion

In Dan Lyons’ hilarious book “Disrupted: My Misadventure in the Start-Up Bubble,” he processes his time at Cambridge, Massachusetts’ based startup HubSpot. One of the gems he surfaces that every startup founder needs to understand and avoid is what Steve Jobs called the “Bozo Explosion”—a phenomenon that starts with hiring B-Players onto your team. This is a problem because B-Players tend to hire C-Players (as they typically feel threatened by A-Players) and C-Players hire D-Players and so on, eventually leading to a dangerous downward spiral into Bozo-dom.

Here is why this is such a massive problem for many startups: No startup I ever interacted with engages in Bozo-dom on purpose. It just tends to happen as it is a) insanely hard to hire great talent (particularly when you are a little, unknown early-stage startup), b) everybody is permanently under immense time pressure, and c) often the hiring managers are just not that experienced themselves.

In software development, we have the concept of “technical debt”—the implied cost of additional rework caused by choosing an easy solution now instead of using a better approach that would take longer. The same happens with hiring: All too often we see early employees, who weren’t chosen all that well to begin with, rising through the ranks and sadly being ill-prepared (and sometimes just not capable) for the demands of their ever-expanding roles.

3. Grow Your Managers

In Reid Hoffman and Chris Yeh’s excellent Stanford course on Blitzscaling, they talk about the concept of going from single-digit employees to double-digit, triple-digit, and so on. Each stage presents its own set of challenges and is radically different from what came before.

I explored this idea with the leadership team of a startup that had grown to about 150 people (hitting Dunbar’s Number). The founders were, rightfully, worried about scaling the company culture, keeping people engaged and productive.

While exploring these (and related) topics, it became obvious that the company needed to invest in their managers if they wanted to leap to the next stage. As is the case with many, many companies, most managers at this company organically grew into their roles and responsibilities—typically without much training, guidance or advice. This works okay as long as you are a small company and the founders can have their fingers in all aspects of the business. It fails badly once the leaders have to rely on their managers to communicate and execute their vision down through the company.

Much has been written about the subject (for example here and here) but it requires a commitment to grow your managers first. Personally, I recommend starting to think about this rather sooner than later—don’t wait until you break through the one-hundred employee barrier, and you have to scramble to build skills fast.

Final thought

As my former boss and now Greylock VC partner John Lilly says: Scaling your business is not only all about product, product, product—but also people, people, people. Having the right people on board is paramount to your success and your ability to scale.