Thriving, not just surviving, the middle overs in the startup game

Can’t slow down; got to keep moving on—that’s essentially the life of an entrepreneur. Twenty four months into operations, you’re most likely to have survived near death a couple of times before finding your business niche and building a steady revenue flow for your business.

You are cash-fuelled for expansion and energized, yet you have some niggling thoughts: My team is good but sluggish in thinking, territorial in their work; or processes masked as governance have slowed down the organization. Maybe you miss the contact with your original team as it’s all via division heads now, and so, you feel that all-hands-on-deck conversations aren’t as frank as they were before. Maybe you feel that your week begins with innovative ideas to explore but is quickly filled with internal meetings.

These are the kinds of thoughts that give you the queasy feeling that your organization is beginning to resemble the large entities you are in the business of disrupting.

Earlier, mid-sized businesses had a choice—stay boutique and cheerfully cash positive. But in a venture capital or private equity funding-fuelled situation, that’s not an option. Besides, no one wants to stay small.

So how do you scale, going through the proverbial middle overs, and thrive, not just survive? Here are three ways to stay in the game and keep the momentum.

Best is better than first

Are you in a “first-mover-takes-all" business model? Most businesses aren’t, so rather than suffer the pioneer’s curse, calibrate your steps carefully by estimating real unit economics, cash-flow requirements and realistic time-frames. Figure out what it takes to build a dominant position in that opportunity. Be the best, and not necessarily the first.

You will be distracted by numerous tempting opportunities, but exploring every angle works well only at the early stages of a startup. Now is the time to scale. From your list of top five to eight opportunities, pick only two that matter and forget the rest. Otherwise, you, the founder, will be distracted with too many to-do items and teams that have disproportionate value-creation possibilities.

Work on your team

Employees love the energy in a business that’s rapidly scaling up and the opportunity to make a difference, but they aren’t entrepreneurs and therefore, will function best only with clearly defined responsibilities and elbow room to perform. In the take-off stage, your organizational structure is constantly evolving, so follow a few rules while hiring. Hire for specific functions aligned to business targets. For instance, sales targets of X in this region. Generic titles that fill organizational boxes only gladden the HR team’s heart. Specific targets and focused attention will kill all chatter about over-priced talent, and create mutual respect among employees. Look for horizontal experience in a résumé as it reflects dealing with ambiguity, handling business failure, and operating in a sub-optimal environment. This will ensure you are dealing with self-starters and aren’t wasting your time having to supervise and “enable" an environment. Separate quickly if it’s not working out—it’s not about competence but about cultural fit. Rather than hurt the business with adjustments that will be painful over a period of two years, recognize a bad hiring decision early and let the person go.

Keep teams tight

For every new idea and opportunity, it’s tempting to rope in cross functional teams of technology, finance, customer insights and commercial to add value—and often that’s the surest way to kill an idea. Scarcity fuels innovative thinking. Explore new ideas and opportunities in micro teams to find the kernel of the solution, and then bring in the armies to build on it further. It is usually a good way to separate project teams from operations. Operations are driven towards achieving excellence, ensuring delight in customer experience and consistency. Creative project teams are less hierarchy oriented, easily bored with status quo and are enthused by challenges, and shaping new ideas. Cross-functional talent and outside specialists work wonders when they think and express fearlessly. This is critical for every founder—recognizing who fits where and powering the teams independently.

So a founder can’t ever slow down, but balancing scale from operations and shaping the next wave can be energizing.

Anil Arjun is an entrepreneur building an intelligent creative talent marketplace. He has worked with ICICI and Reliance in project finance, retail, digital and entertainment in India, the US, the UK and Malaysia.

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