Building a company is a lot like raising a child. This is especially true when you get a strong pull from the market. It seems like just yesterday we were in beta testing and now we have global production deployments. The sentiment, “they grow up so quickly” never seemed more apt.
Just like a child in its infancy, you can see the kernel of a company’s personality starting to form. Most of the day-to-day work involves taking small steps that can seem daunting. Like changing diapers, midnight feedings, and temper tantrums, a company accrues technical debt, experiences the scrambles to make it work and feels the growing pains of doubling in size every few months. Just like parenting, you make lots of mistakes, gain experience and hopefully learn how to navigate the world. As a startup CEO, the key at each stage is to figure out the right focus to have based on your phase of development, and to transition to the next stage as quickly and with as few problems as possible.
In many ways, companies mature in much the same way children do early on. The life of a startup can be measured in development or event fundraising stages, and you even follow the ABCs: There’s the seed stage of identifying and proving out the opportunity, the A stage of building the initial version of the product, B stage of developing a scalable go to market, C stage of scaling and beyond. Although each phase has its own challenges, understanding best practices and knowing what to expect at each phase is crucial to achieve success.
Having served as an executive at several startups, I’ve found life at the B stage can be most challenging because it’s where a company shifts from the uncertainty of the early years to the repeatable process that allows a company to grow and flourish. As a Series B CEO, the day-to-day life feels a lot like raising a toddler in the throes of the “terrible twos.” On one hand, the company has figured out how to do many things on its own. We have a good handle on our market, we understand the ins and outs of our product, we have enthusiastic customers, and different departments are learning to work both independently and collaboratively. But there are also many things that the company still has to figure out. The organizational structure is more complex than it was a few months ago and it’s natural for a CEO to lag the organizational changes and to stay focused on fixing every little problem long after the company needs it. Of course, there are always the occasional temper tantrums, usually induced by lack of food or sleep.
The difference between CEOs who successfully navigate the terrible twos and those who get consumed by them is in how they handle this transition period. The most successful Series-B CEOs focus on where to go next and trust their teams to navigate the uncertainties that still arise. Naturally, there are points in time when you need to weigh in, like when the product team drifts from the vision when the sales team starts chasing deals that don’t fit any discernible pattern, and when marketing throws their hands in the air because they feel like they’re running in circles. These are small course corrections and can often be addressed by reminding the team of the company vision and help them figure out how to map their work to this vision. “You need to eat your veggies to grow big and strong” equates to “you need to sell the business value because we’re building a repeatable process.”
As a first-time CEO, the hardest part of being at the Series B stage has been figuring out the execution timeline for this transition. Like a parent anxiously watching the development of their child and looking forward to the next big milestone, I struggled daily to judge the time that it took to get our footing. The entire transition from Series A newborn to Series C pre-adolescents requires calculating how quickly to put capital to work, given very little data about market adoption, while putting enough resources to work in the right places. It’s impossible to get perfect even if there was a “right” way—which there isn’t.
As a parent as well as a startup CEO, staying focused is key. And just like raising a child, I’ve realized that it takes tremendous discipline to maintain focus on what the company needs most in each phase. I’ve seen many companies lose confidence during this transition from childhood to adolescence, and start to meander away from the big picture. This is precisely when the company needs a strong vision and aggressive, but achievable, goals. The deep understanding of our vision, which we take for granted early on when all our hopes and dreams are so clear, is not yet imbued in the developing company. It’s easy to get distracted trying to solve all the problems that came up back when the vision was obvious and everything was easy to fix. In the B to C transition, I’ve seen the best CEOs let their team find its way through the growing pains and keep reminding them where they are going and why. Before you know it, you will have survived the terrible twos. It’s then that you realize the journey has only just begun.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
Image credit: CC by John Curzon