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Start(up) as you mean to go on


On a recent trip to New York City we had the opportunity to have lunch with some of the founders from a global incubator for top-tier startups. With panoramic views over Manhattan from the corner-office of a 48th floor development on the banks of the Hudson, it was certainly going to be memorable. And while it was incredibly inspiring to hear about these fledgling businesses, each of which was aligned to tackling one or more of the United Nation’s Sustainable Development Goals, it was also eye-opening and eye-watering to hear about the personal impact being part of an early stage startup can have: Every one of the founders we spoke to was open about the cost to their personal relationships, their financial stability, their physical health and their mental wellbeing. Most said they have had, or were having, regular therapy or counselling sessions, as were many of the founders in their professional networks.

Yet they remained resolutely committed to their companies and their vision, and the general sense was that it “comes with the territory.”

“The outside-in perspective is that it’s all foosball tables and nap pods”

Growing Pains

As they grow, many startups continue to build on this culture of personal sacrifice. While the outside-in perspective is that it’s all foosball tables and nap pods, the reality is that these are just a few basic home comforts for staff members that are committing significant portions of their lives to help the business survive during its first few tentative stages of development (and in reality, nap pods are only marginally more comfortable than the fabled ‘sofa’). Heck, if your staff are spending nights and weekends at the office, the least you can do is offer them a free breakfast in the morning, right?

For those companies that make it through this initial period of growth, they’ll usually retain the bulk of their key staff. Having walked through fire for this venture they’re understandably passionate supporters – You don’t stick it out without buying wholeheartedly into the vision. Sure, they’ll also have the prospect of pre-IPO share options to sweeten the deal, but these again should be seen as fair compensation for the significant costs they’ve had to bear to see it all the way through to IPO (or more likely acquisition during an earlier funding round), with the very real risk of course that it never will. Fewer than actually 1% do.

“Even as they grow and become less agile, change continues to be an essential element in their journey of success.”

The Only Constant is Change

Added to this mix is the reality of a constantly changing internal and external environment. Whether it’s pivots towards new market opportunities and / or away from competitive threats, or it’s the shifts in organizational structures and operating principles as the business optimizes itself for the next raft of challenges, change is the only constant. It’s a cliché, but like most clichés it’s based in truth (which is itself a cliché of course). The pivot is, in fact, a rite of passage for most startups. The idea that you get it exactly right, first time, is a myth. Most successful businesses pivot at least once on their journey from good to great, and many more than once.

As Jared put it at the end of Silicon Valley season 1, when Pied Piper realized they had no business: “We’ve got a great name. We’ve got a great team. We’ve got a great logo, and we’ve got a great name. Now we just need an idea. Let’s pivot!”

Here’s a few real-life pivots that probably don’t deviate too much from that satire:

  • Twitter started out as a podcasting platform before pivoting to the micro-blogging site we all know and love today
  • Pinterest was a shopping site where users could post photos of sale items for their shopaholic friends, before the founders realised that the ability to build collections of photos was the main USP
  • Flickr started out as an online role-playing game with a small photo-sharing feature that turned out to be the best part of the game, and the business
  • Slack also started out as a video game company before the pivot towards group chat
  • And speaking of groups,Groupon was once a platform for people to rally around social causes before becoming a cheap way to feed a coach-load of tourists
  • Even our very own Grilled Cheese Coaching Co. started out as a humble sandwich shop in Brooklyn*

[*this isn’t true]

Because startups are small and agile, they can literally wake up tomorrow to become a different company. Even as they grow and become less agile, change continues to be an essential element in their journey of success. That’s quite a burden to place on staff, and anyone that has existed in this environment for long will either have developed ways to cope with that burden (some people literally thrive on it) or, more likely, they will be struggling to deal with it just as their founders have had to since the very start of the journey.

“What they often find however is the remnants of the startup culture: A hairball of organizational and operating principles”

The 1%

The companies that survive the twists and turns of those early stages will emerge with a new and equally real set of existential challenges to overcome. Sure, the product or service will be validated in the market and there will be happy early-adopter customers and a sustainable revenue stream. But there will also be rapid organizational growth – fuelled by that revenue and the outside investment that it has attracted. A nice problem to have perhaps, but remember, at the core of that business is still that messy, unstructured, passion-fuelled all-hands-on-deck culture of a startup that got it there in the first place. That core worked great when it was a handful of people in a garage – in fact it was a vital part of the success story. Startups thrive on a lack of resources, and the innovation that happens in the melting pot of necessity is just as vital to the operation of the company as it is to the development of the product. But…it don’t scale so well!

As floods of new employees join the organization, they will expect systems and processes to be in place to support them in their jobs and, perhaps more importantly, in their careers. They’ll expect well-defined organizational boundaries, clear goals, realistic and measurable performance expectations, and the training and development that will help to meet them. They’ll probably expect to go home now and again too.

What they often find however is the remnants of the startup culture: A hairball of organizational and operating principles, no formal performance management processes, “on-the-job” training (based on the thrown-in-at-the-deep-end sink-or-swim principle) and inexperienced managers who have been forced out of their long-time technical roles because they “know the business better than anyone.”

This lack of structure, which many will resist as a form of bureaucracy that signals the end of the good old days, unfortunately leads to retention issues, as new employees without the maniacal commitment to the company vision will not tolerate the startup culture in the same way as employee zero did. The major threat now becomes internal conflicts and interpersonal challenges, and the high staff turnover with inherent financial and human costs that follow. Companies with great products or services that don’t get to grips with this stage of their evolution still risk failure.

“The reality is that the human cost of innovation doesn’t have to ‘come with the territory'”

Crossing the Chasm

It’s clear then that there are opportunities to support the humans in the startup eco-system at every stage of their development, whether it’s coaching founders during their time in the incubator (none of the founders we had lunch with had worked with a coach BTW), new managers as they grapple with letting go of the technology and learning to love the people and systems that will help them take it to the next level, or employees that are struggling to maintain balance – and build a career – in the midst of all this chaos. The reality is that the human cost of innovation doesn’t have to “come with the territory”, and while the helping professions may have experienced a boom as the startup bubble shows no signs of bursting, prevention is always better than cure in our book.

Back on the 48thfloor, as lunch was wrapping up, there was one more question left to ask our founders:

Knowing what they know now, would they do it over again?

“Hell, Yeah!” was the unanimous response around the table.

Here’s to the crazy ones

What now?

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