The evolution from startup to scale up boils down to one key attribute: leadership.
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Entrepreneurs and VCs frequently talk about how the first phase of a company’s lifecycle can be distilled down to one singular goal: finding product-market fit. But what comes next? How does a company on a positive trajectory, with a product customers like and are willing to purchase or use, grow into a successful multibillion-dollar company, or, better yet, an enduring franchise? In my experience as a former operator who helped launch and run multiple businesses within Google and who now as a VC focuses exclusively on growth-stage companies, I can answer unequivocally that the evolution from startup to scale up boils down to one key attribute: leadership.
Below are battle-tested leadership lessons in growth:
1. Prioritize 10X hires, especially among leaders
When I first started managing, I was grateful for any team member who was pretty good. Pretty good reports certainly added more value than I could alone. But then I brought on incredible hires, and my perspective completely changed. These stars showed me what excellence looks like. Technical circles often discuss the 10X hire, the employee whose contributions are 10 times that of typical employees. Too rarely do these discussions extend to business and managerial roles where the impact is every bit as dramatic. That said, never sacrifice team cohesion for a single hire, no matter how strong, if you believe the person will create discord.
- Business hack: When interviewing for a new role, especially in an area outside your core expertise, seek out the absolute best in the world that you can find. Sure, you may not be able to hire many or any of them, but chances are that at least a few of them will talk to you. Think of it as an informational interview, except in reverse. Let them show you what excellence is, and write your job description based on what you learn.
2. Do your recruiting math
I once had to hire 150 people in three months. Several weeks in, it felt like nothing was getting done. The reason: Nothing was getting done. I asked my team why, and they told me to do the recruiting math. Sure enough, I whiteboarded their tasks and realized that each needed to work 12 hour days for the next three months–with no time to spare for their “day” jobs running the business. Since then I always encourage CEOs to do their recruiting math before setting recruiting goals. Growth stage CEOs typically spend 10-25 percent of their time on recruiting. Balance and careful deliberation are key; teams need to spend enough time recruiting to meet their most critical needs but not so much that they lose focus on the business.
- Business hack: Sequence out the most critical hires over a planned cadence, by, for example, hiring a new VP of engineering this quarter but pushing out the new marketing leader to the next quarter. This prevents recruiting overload, a common cause of executive burnout.
3. Throw new hires into the fire (always with water on hand)
I’ve seen too many companies successfully recruit incredible hires, only to fumble the next step. When you’re scaling quickly, onboarding becomes critical across all major business functions. Someone needs to be dedicated to it–frequently full-time.
Connect new employees to the company culturally and emotionally. Best practices include buddy and mentorship programs, creative schwag (watermelon, anyone?), cross-functional team building activities and coffee (virtual for now) with the executive team. Onboarding also needs to include carefully planned information transfer. Managers should create and centralize key documents and introduce new employees to all stakeholders across the organization.
- Business hack: Sales teams tend to have the most developed onboarding processes, frequently including experiential training, such as practice pitches followed by real-time feedback. This amounts to throwing them onto the fire–but not too fast because helpful coaching is also key. Newer teams can borrow onboarding practices from the teams with established programs and make adjustments as needed. Just remember that onboarding extends beyond the first week; check in regularly with employees after they’ve engaged with their new roles.
4. Customer obsession never goes out of style
Great companies, whether they’re startups or $100 billion-dollar brands, obsess over their customers. Strong leaders perpetually talk to customers directly, listen to sales and customer care calls, and ask for feedback from their customer-facing teams. They engage when they’re developing brand new products, and they stay engaged as their products mature. And customer obsession can’t be limited to the C-suite; it must permeate the entire company.
Daniel Dines of rapidly growing enterprise-focused UiPath sets frequent flier records by circumnavigating the globe to meet with customers and sell them on his technical vision. Luis von Ahn of the popular language learning app Duolingo relies on extensive A/B testing to gather feedback from millions of customers simultaneously in a rigorous, data-driven way. Both approaches work beautifully, and both CEOs have successfully infused customer obsession into their companies’ DNA.
- Business hack: Require engineers and product managers to regularly listen in on sales and customer care calls. This builds cross-functional empathy and unites the company around a shared goal of customer success.
5. Don’t grow too soon (Bonus tip!)
If you haven’t truly achieved product/market fit, scaling too early–and burning through all your hard-earned capital — is a sure-fire way to scale your company right into the ground. Timing is everything.
There’s an old saying that leaders are born, not made. In my experience, I’ve found that the greatest leaders make themselves. Unwilling to rest on their laurels, they’re voracious learners on a perpetual quest to help their companies reach their potential. Now’s your time to learn. Go forth and scale.