Lecture 1: What We Now Know

“The only fallacy in that is that you assume your first customers will be in the mainstream. It turns for most startups your first customers are going to be crazy people like you.”

I would summarize lecture 1 as stating, “This is how a big company does things, it is irrelevant to startups because it rests on the assumption that you know what your customers want”.

We All Want to be Big Big Stars

I felt that a lot of lip service was given to assuring the listener that “don’t worry, when you’ll grow big you’ll get to play Offices&Managers, with lots of Rolodex-wielding expensively-suited VPs executing the business plans that you’ll rain upon them like celestial columns of fire, it just isn’t relevant to a startup“.

I’m not sure I agree with that.

I’ve met a successful serial entrepreneur that, when starting a new business, immediately hires a few VPs and starts the infrastructure for a big organization. I asked him about it, he told me “Why waste time on growing? We know what we’re building, there’s no reason to limit myself to building it small and slow if I know how to manage a big team”.

On the exact opposite end, I strive to emulate Gumstix Inc., a company that sustained serious growth during three years from a concept to selling mass produced hardware while staying exactly at the original employee roster of 6. “Our long-term goal is essentially not to grow the number of employees. When we want to do something, we don’t hire, we automate.”

David and Goliath

Big means heavy, for better and for worse. Small means flexible, for better and for worse.

Big companies will suck at entering new markets and reacting to technological changes. That’s why startups are viable despite being so much weaker than their established competitors (in terms of raw power).

Small companies will be very efficient, but won’t be taken seriously by customers and peers and won’t be able to grow without becoming big and slow.

You should choose based on your business and the personal preference of the team. It is common to choose to begin small until you’ve settled on a good business and then grow as fast as you can, but then again, it is also common for companies (even some startups!) to develop new products in Waterfall methodology, so don’t take anything for granted, think for yourself.

Epilogues

And there’s always the startup I once worked for that grew to tens of employees within weeks of formation – the founders there got their financing not from VCs but from huge customers dying for the product to be ready. Like the other example I gave of fast-growing startups, these guys were serial, it probably doesn’t work as well before you’ve proven yourself once (and definitely don’t try to grow fast if this is your first time managing many employees).

~~~

Once again, with feeling: “Our long-term goal is essentially not to grow the number of employees. When we want to do something, we don’t hire, we automate.”

Amazing. I’m considering growing my business without ever creating more than one level of hierarchy, solely by mitosis.

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One thought on “Lecture 1: What We Now Know

  1. Also relevant is http://www.forbes.com/sites/victoriabarret/2012/05/15/qualtrics-techs-hidden-gem-in-utah/:

    “The Smith trio pride themselves on not having any titles at all. The only sign of status comes when someone sells $1 million worth of software and their iMac screen goes from 21 inches to 27. “The VCs kept asking us to name our middle management. That was their big worry. We have none,” crows Ryan. Even health care benefits and IT are done by staffers who hold other jobs in either sales or support. The goal is to have everyone focused on customers. Every ten minutes or so red sirens flash and a low-pitch bell rings. This means a customer calling for help has waited longer than three rings for a pickup. When the bell sounds, anyone in the company can and should answer.

    Qualtrics recently released software for personnel managers looking to do performance surveys. Ryan needs to hire 250 new people and isn’t sure how he’s going to maintain his idiosyncratic culture.”

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