For all the headlines that are written about founders’ “garage to greatness” stories and the recognition the products and services they build may have in the public, what truly makes a company built to last are its people.
This goes from the people who join from day one, accepting that partial equity compensation and pay cut for a company mired in uncertainty, all the way to people who join far later in the journey, when the company has already gone through much but still needs the fresh insight and capabilities of new hires to get to the next level.
As Phil Opamuratawongse, CEO and co-founder of Indonesian logistics-first commerce enabler Shipper puts it in a panel at Insignia Ventures’ first Founders Club event:
“I saw a stat that [for] companies that grow 200% and companies that grow 50% year over year, actually the systems and processes are very similar. They use the same tools, they have the same sales process, they have the same tech stack, et cetera. But the difference between the two companies is the people at the end of the day.”
To some extent, this idea can seem pretty intuitive. But leading and developing people as an organization scales is arguably the most challenging aspect of building a company. It is also that aspect of company building where the risks and issues only compound over time regardless of measures taken to mitigate prior risks and issues, compared to other aspects like finding product-market fit or achieving profitability.
Hence, this is also one aspect of company building which company leadership’s responsibilities increasingly fall under. As Hendra Kwik, CEO and co-founder of business finance platform Fazz shares in the same panel:
“I think at our stage where [core] product-market fit is there and unit economics is there, it’s all about making sure that every single people that you onboard really provide the best capacity.”
It is also the most difficult to create “formulas” or “best practices”, primarily because every organization is unique. As Steven Wongsoredjo, CEO and co-founder of social commerce platform Super comments in the same panel:
“In the end, companies always have their own formula. I’m not saying that this is the best way to run the company, but this is the way we think as a company, [that with the] ups and down that fighting with simplicity, positivity, and humility is going to make your life easier on the ground.”
So instead of looking at the organization top-down, which can vary too much with complexity, we look at the leaders and learnings from their perspective.
In this article, we curated quotes and sharings on people and culture from the panel with Phil Opamuratawongse, Hendra Kwik, and Steven Wongsoredjo on December 13, 2022. As the CEOs of venture-backed growth-stage companies, what have they learned thus far about leading and growing organizations that have quickly gone from less than 50 people to more than 700 to 800 in the span of roughly three to five years each? Is there anything that perhaps early-stage founders should consider to reduce or avoid the challenges they faced?
TLDR of 12 Learnings for Early-Stage Founders on Leading Fast-Growing Organizations:
- Build an organization of missionaries versus mercenaries.
- Build an organization of positivity versus negativity.
- Hiring for values means hiring years ahead and building relationships early on.
- Develop execution/project-based funnels for internal hiring and leadership development.
- Anticipate international hiring for engineers (>100) even as the engineering team is small (60-70).
- Plan for what the organization will look like at scale (50 vs 200 vs 700) and be proactive in preparing to fill these roles.
- Develop a culture of humility and synergies in an organization with people who have been with the company since day one and new joiners who bring in expertise and experience from larger companies.
- An important question to figure out over time is how to effectively scale communication channels.
- From player (operator focused on execution) to captain (manager inspiring by action) to coach (high-level strategist focused on putting people in the right roles), startup founder-CEOs need to evolve in the way they lead from seed to Series A and beyond.
- Sustainable leadership is not telling teams what to do every day but instead enabling processes for the organization to learn and decide on its own (while still being aligned with top-level direction).
- There’s more to life than your startup.
- It’s important to have your own ways to mitigate stress with increasingly difficult decisions as the organization grows.
A culture that unites and endures is built on hiring people who are mission-driven and positive in the face of adversity.
Build an organization of missionaries versus mercenaries
Phil shares, “How do you build a culture of missionaries and not a culture of mercenaries? So missionaries are essentially people who believe in the mission, who are bought into the mission, and work because they want to serve the customers and do the best they can. And mercenaries are people who are just there to make a quick buck and hustle. I think knowing where you have missionaries and where you have mercenaries and designing your org structure [around that is important].”
Build an organization of positivity versus negativity
Steven shares, “What we’ve been learning for the past three years is that negativity is very contagious…positive people will be affected by these negative people…and to remain positive is paramount in building a startup because what we’ve been building is bizarrely hard.”
Sustainable hiring anticipates company growth and leverages pipelines to align with company values and leadership needs
Hiring for values means hiring years ahead and building relationships early on
Phil shares, “It’s really important for us to get the right people with the same set of values in the organization. And I think that’s harder to judge — little things like we believe in folks who think bold, who think big, who want big outcomes, not people who do a lot of small things really well and get really small outcomes across a lot of small things. And just that quality itself, I would say has been one of the hardest qualities to find at Shipper as we built the team.
So what that means is we have to constantly build a pipeline of people who fit those qualities and make sure we have those folks in the back of our minds so that as we continue to grow and build a team, we’re able to fill in the gaps really quickly with the people that we have in the back of our mind. So actually a lot of the hires that we make we’ve probably known the folks for years, one or two years in advance.”
Exhibit A: Chief Customer Officer Craig Wheeler’s own relationship with Shipper first as an enterprise customer before joining the company
Develop funnels for internal hiring
Phil adds, “We start doing this special projects team [early on]. And that was a team that basically does [a variety of] projects that are really important. And as you grow your business, there’s always a lot of small things that come up and you used to need someone to [work on] it. And that’s where the special projects team would spend most of their time. And those projects are really good projects to help them get onboard and become leaders of the organization. So as we continue to scale very quickly, that special projects team was a really good funnel for moving people into new leadership roles that we had so that we wouldn’t have any hire gaps as we continued to grow.”
Anticipate international hiring for engineers even as the engineering team is small
Phil adds, “I think when you hit a hundred engineers, you should start hiring outside of Indonesia, and I think it’s very difficult to scale an engineering team beyond a hundred engineers. It can be anywhere around the world that you feel comfortable with, but that means you should start thinking about that at probably like 60 to 70 folks, because [going from] 60 to 70 folks to a hundred engineers, it happens really fast. So you probably start thinking about that at 60, 70 engineers, and then by the time you hit a hundred, if you want to continue to scale that engineering team without any problems, then you have that international strategy in mind.”
More on how Shipper approaches hiring engineers through the lens of their CTO and VP of Engineering:
Managing organizational complexity means having proactive awareness of diverse characters and finding ways to scale communication across these diverse characters
Plan for what the organization will look like at scale and be proactive with preparing to fill these roles (e.g., develop talent, and build relationships with potential hires early on).
Phil shares, “Have a perspective on where you have missionaries, where you have mercenaries, where you have people who are strategic thinkers versus where you have people who are process-oriented people — have a perspective on what that organization structure looks like at every point in time, and the people who fit in that org structure at 50 people versus 200 people versus 700 people, [because] it’ll change very quickly…being proactive about that rather than reactive is really important…the biggest waste of time for us as an organization is filling gaps in the organization and filling people problems that we were not proactive about.”
Develop a culture of humility and synergies in an organization with people who have been with the company since day one and new joiners who bring in expertise and experience from larger companies.
Steven shares, “What [humility] means is that we do have the people who joined us early in the day, and those folks are the ones who really understand in and out what are the strengths and the weaknesses of the company. And in the stage of transitions when you are gonna start recruiting [already experienced] people to come in, you as a CEO need to make them intertwine. The former need to be able to share what’s happening on the ground as well as the latter — who usually have worked in a bigger company compared to us — need to be willing to share the experiences that they’ve had prior to working with us.”
An important question to figure out over time is how to effectively scale communication channels.
Phil shares, “You go from like a lot of one-to-ones, to one-to-many, and then you have to figure out how to get many-to-many to communicate effectively. So putting the right processes in place where, when you want something or when you want the company to go a certain direction, there’s an effective communication process, where you’re not having to talk to every single person. I think that’s actually a really [hard] process to get right.”
Leadership Evolution: From Doing Everything to Building A Sustainable Organization Where You Do “Nothing”
From player (operator focused on execution) to captain (manager inspiring by action) to coach (high level strategist focused on putting people in the right roles), startup founder-CEOs need to evolve in the way they lead from seed to Series A and beyond.
Steven shares, “When we were a small seed company, people call the CEO the “Chief Everything Officer.” I literally opened the first office with my hands, mopping on the floor, I would [do] the dirty work here and there because back in the days we didn’t have money. But that taught us the lesson of not taking money for granted and being able to solve things not with money but with value.
In the seed stage, you need to become the striker, the defender, and the midfielder. You need to score the goal. You need to make it happen. You need to defend, you need to save the goal, and so on. But once it goes up to Series B, you need to become a team builder. You need to become a coach. You need to be on the sideline and let your team kill the game.”
Hendra shares, “When the startup was still up to 50 people, a lot of the success of the startup was driven a lot by [being like a player]…on Series A, at that point of time, that’s when you really need to convert from a player to a captain.
As a captain, it’s not about your hard skills, but it’s about how you inspire your team, and how you can push them to perform more than their capacity. When we crossed the 300-people mark and started to operate in other countries, at that point, I started to evolve into a coach. As a captain, you are part of the team fighting, but as a coach, you are not playing but you need to identify who are the players you put into the game, sometimes you need to substitute players…”
Hear more from Fazz’s leaders on the field in this podcast:
Phil shares, “Very quickly try to be the “VP of nothing”. That basically means you don’t want to be the “VP of everything” doing everything. You want to hire people whom you can trust to do those things and try to be the “VP of nothing” as soon as possible. Especially as once you start raising venture money, the faster you can get to become the “VP of nothing”, the better it is for the company.”
Sustainable leadership is not telling teams what to do every day but instead enabling processes for the organization to learn and decide on its own (while still being aligned with top-level direction).
Phil shares, “…there are cases where letting the team — and it doesn’t mean I know that it’s gonna be a mistake — but letting the team make mistakes is probably a better outcome than trying to fix the problem and force the team a certain way…The ability for the team to do post-mortems, iterate, and learn by themselves without you always being there to push is really important…We spend less time on, “Hey, we think this is the right decision.” We spend more time in getting the company to go through the right process of learning and building.”
Steven shares, “[Your team] may cause you to concede the goal, but that’s part of the game. You’re going to have to learn what are the strengths and the weaknesses and try to orchestrate the game and how they can play the game with that strength so you can win the game because at the end that is a sustainable business.”
Living Life as Founders
There’s more to life than your startup.
Steven shares, “I’ve learned as a CEO of the startup is that we often got stressed out on things that we couldn’t control and we get upset when the company gets bigger, [because] it’s a higher degree of things that you cannot control…sometimes you wake up at 3:00 AM and 4:00 AM at night but you couldn’t do anything. You just have to save your energy and fight for the next day. It’s really hard to do it, but that’s how we have to do it because we have our own lives — your startup is not everything in your life…You need everything to make you as a whole human and functioning as a better CEO day by day.”
It’s important to have your own ways to mitigate stress with increasingly difficult decisions as the organization grows.
Hendra shares, “I think it’s easier to do things when you are still the captain and the player (see previous quote). When you are the coach, it’s very mentally draining and it’s very important for you to make sure that you have a way to mitigate the stress because it’s like you want the team to win, but you cannot play to score the goal…It’s going to be a lot of pressure. It’s not tiring [physically], but it’s mentally tiring. And that’s when you have to meditate…A lot of founders, when they start to scale to a lot of people, they have a lot of issues, especially we see that recently…where sometimes there are hard decisions that need to be made and then some people will not be happy, but it needs to be decided.”