How are you Structuring your Startup?

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Starting a company is overwhelmingly exciting.

You are pouring every ounce of your being into a product you believe will make the world a better place. Your team is small, fast, and motivated. If you’re the right combination of smart, lucky, and persistent, things will start to click and you’ll grow. You’ll grow way faster than you wanted to.

Congrats, you have capitalized on your opportunity to create an amazing product.

Don’t miss out on your next big opportunity — to create an amazing organization.

For some reason people neglect this. When they reach the size where some structure makes sense, they take shortcuts by copying the standard corporate hierarchy you find all over. I find this strange because everyone knows working in those structures sucks. For most people, it’s why they quit their job at Big Co. to join a startup.

Why would you want to re-create the exact monster you just left?

I’ve talked with a lot of startup dorks in the last 3 years. The recurring theme I’ve seen is that no one stops to ask “why do we do it that way?” when it comes to their organization. They’re amazing at asking “why do we do it that way?” when it comes to product. It’s that very question that led them to their innovative awesomeness. But for some reason it is far rarer to question the way they operate internally.

I recently had a conversation with a startup CEO. The first 30 minutes or so I sat in horror as he recounted these soap-opera-esque stories of political fights and power dynamics he’s currently wrestling with. The scary part was that he seemed so bought in that this was The Way.

When I asked him why his company was organized in such a way that made these problems exist, he said something interesting: “There is no other way to run a software company.”

I was super taken aback by this and I realized this is the kind of thinking that has to change. And to be clear, I don’t blame this CEO or think he’s a bad leader. In fact, quite the opposite. But the fact that so many intelligent and driven people haven’t ever thought about alternate ways to run an organization is a shame. I bet they could make something truly amazing.

To reach the next level of structuring organizations, we need to:

  1. Acknowledge that the organization that worked during the Industrial Revolution isn’t suited for 21st Century technology.
  2. Recognize that companies have the power to change this and to experiment. Just because no one has done it yet doesn’t mean it can’t be done.
  3. Bring existing examples (successes and failures) to the mainstream.

Number 1 feels obvious to me and building the case for it would require a whole other blog post (perhaps a dissertation).

Number 2 requires snapping yourself out of a comfortable (and unfortunate) follower mentality.

Number 3 requires just a small bit of research. Zappos is a pretty big examplefor starters.

Imagine what we could do if we applied a fraction of our overall creativity to the way we organize ourselves, and had the confidence to test out new approaches. I think the next set of truly massive, truly robust, truly long-lasting companies will be the ones that perfect this type of experimentation.

And the ones that do it best right now will attract top talent.

So don’t screw up and ignore it.

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