Today is my last day in full-time employment and marks the end of a significant chapter of my life. 5 years ago I moved from a big American based investment bank to a 10-person start-up called "All My Plans" (AMP for short). Along the way I have seen the AMP start-up merge with Runpath, a small digital agency, which has grown into a successful medium sized business providing financial product comparison services behind many UK household names. I have witnessed the growth stages of a company. From infant to adolescence, and like a human going through the same stages, I have seen hard and rewarding times alike.
The move from a big corporate business, all those years ago, was an intentional one. It was motivated by the need to find the answer to the question - what makes start-ups successful? In the hope that one day I could apply the "secret sauce", and make my own business a reality. The following are the lessons I have picked up during my tenure.
- Successes of a start-up is not defined by its bottom line
- Growth is optional
- Culture is important
- Start-up employees may not make the best long-term employees
Successes of a start-up is not defined by its bottom line
One of the basic concepts of human psychology is Maslow's Hierarchy of Needs, developed by the American psychologist Abraham Maslow. The hierarchy conveys a simplification of five motivations that drive human beings. These are ranked, with item 1 being the most fundamental. If these are not met then the individual will "feel anxious and tense":
Money is important. Without it we would struggle to meet our most basic physiological needs (ie. shelter, food, water), as well as safety in terms of financial security. However, as long we have enough money to meet these needs then the rest is down to the relationships we have with our peers and the way we interact with them. The same can be applied to start-ups. As long as you meet your basic financial needs as a company, then the rest is down to the relationships you have with other business' and clients. Enjoy and nurture those relationships!
Growth is optional
There is a lot of pressure as a start-up to grow. Either due to investor pressure (if you choose to go down that route), or because it's the "norm" in our society. This is probably related to the first point I made - bigger company equals larger profits. Right? But growing is hard. Scaling is tricky.
I remember reading an eye opening a post on the Signal vs. Noise blog about the approach that 37 Signals took to growth (you can check out the original article here - Ask 37signals: Pressure to grow?). Do you even need to grow! Don't fall into growing by default as it come with it's own set of problems.
Culture is important
If you do choose to grow then make sure you keep an eye on your culture. The things that define you as a company in the early days, such as weekly beers, pizza nights, lunch and learns, open communication...etc. can disappear as you hire more people and you become busier as a business. This is not intentional, but happens through osmosis as you and your management team take their "eyes off the prize" and these activities no longer happen organically. If you want to learn more about this, then check out the following video from Funding Circle's CTO David Townsend - The Canary Is Dead
Find alternatives to promotion to reward staff
Good start-up employees are self-starting generalist - employees that can happily work in isolation or as part of small teams. I lump myself into this category as I thrive off taking ambiguous ideas and turnging them into reality.
However, be careful. If your start-up is successful and you choose to grow, then these same employees will organically fall into more senior positions as you take on more staff. Positions which they may not necessarily be trained or wanting to do. These positions may not be the best use of their time, so find other ways to reward you staff. Share schemes or Long Term Incentive Plans for example.
I hope you found these lessons useful. They are the things that I will be holding close as I start my new ventures over the coming months.