3 challenges to overcome transitioning from startup to growth phase
I was reading Ed Sim’s (a great VC) commentary about advising companies and what it takes to go from Startup phase to Growth phase.
As a VC he notices the struggles . As an entrepreneur who has gone through this once and about to go through it again I boil it down to three (3) challenges that you must overcome in order to transition from the startup phase to growth phase.
1.) Structure – To many times people form their own lose groups or are doing so many different things that when it comes time to narrow roles, many can not deal. This can even mean you. This is why investors ask you if you still want to be CEO (the answer is “what ever is required to get the company to grow I will do it”).
I like how Ed puts it – “operating solely in departmental silos is like having each body part with a different brain-sure it is your body but it is also hard to move fluidly if each body part is moving in a different direction.”
2.) Execution – Often, it is the visionary person or team that create products without a clue how to grow them to have real product and marketing teams. Still you don’t want to be that manager known for overpromising and not delivering.
Ed says “rather than complaining about engineering, for example, sales and marketing can now understand engineering priorities and what it may take to adjust and rearrange some of them to meet the revenue targets for the quarter.”
3.) Leadership – While vision is important, it is having the leadership across all levels be on the same page that makes or breaks a company at this stage. If everyone can not identify what they do, the long term vision and top goals for the next 2 months, you are in trouble.
All of this comes down to communication and I will leave you with a quote from Ed that says it all.
“Don’t make an allergic reaction to scheduled meetings and a simple lack of organization your cause for execution problems.”
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This is really a great post. And very relevant to what we’re doing at OnCard Marketing. While you present some good trouble-points and things we should watch out for, I felt that you didn’t necessarily pose a solution to any of these problems besides just over-emphasis on communication, which we are focusing on day in day out. I think the issue of stepping down as a co-founder CEO is tricky because I personally just don’t have confidence in anybody else leading our company. I will wait for somebody to tell me that our execution is suffering (which it isn’t so far thank god) and that they have somebody better. I really hate hearing problems without any proposed solutions. The only thing I can share with you all is that while having one and two month execution plans is critical, the company needs to be brutally honest with itself if it’s not seeing results and nimble enough to change direction and create another strategy. If you get bogged down in a two month strategy despite early signs of ineffectiveness you’re doomed. Keep up the great posts and thanks again for your insights.
JT,
An excellent comment. You are right that there should be solutions with the problems. I will make this part of a follow up post next week. Keep me honest, that is what I depend on!
-Steve
Steve – Nice blog. I teach entrepreneurship and some of my students have discovered your postings. To help JT out, there’s a great little book from the Kauffman Foundation called Leading At the Speed of Growth that outlines the evolution of the entrepreneur into a CEO and is nicely actionable. I hope you find it useful.
WD