Flexible monthly business insurance
Startup teams can change extremely quickly, especially when they’re scaling up. It’s not unusual for a business to double, triple or quadruple in size, in a matter of months, once they’ve got some funding in place. As a founder, this is what you’ve been working towards, bringing you one step closer to achieving your vision. But handling this rapid change can also be stressful, and growing pains are a natural part of the process.
Fast growth can be particularly tough on the original team who see the business they joined turn into something quite different, almost overnight. In those early days when you’re a very small unit, everybody feels involved in every aspect of the business and always knows what everybody else is up to. Naturally then as the team gets bigger, that feeling goes away a little by little until all of a sudden… “back in the day things were different”. As new personalities and characters enter the business, the culture inevitably starts to evolve.
It’s at this point that original team members might start to get restless, as they wonder whether this new company is really something they want to be part of. So as a founder, how you manage the transition is critical to keeping everybody onside so that you don’t suffer from premature attrition.
Here are some of the most common growing pains I see in startups:
Loss of transparency and openness
One of the big changes that can affect people is suddenly feeling like conversations are happening in other rooms and that the original openness and transparency has gone. While, this shift is usually for practical reasons, such as not wanting to disturb or distract other team members, nonetheless it can still make some people feel left out or alienated from what is going on. It takes intentional changes in team norms (such as better all-team meetings) to counteract this and keep communications wide open and clear.
Loss of progression
Being in an early team is an intense time. You get involved in a lot of different things, make more mistakes and develop a lot faster than you would in a more established company. People that choose to work in startups usually thrive in this environment, but the danger is that they’ll become impatient when they feel like they aren’t growing and developing as quickly. A year can feel like a long time in startup land, and after that time, people can start to think: “Okay, what’s next?” They’re usually looking for either more money (as a reward for how much they have developed) and/or more progression, but it can be difficult to offer these in a business that is still short on budget and structure. Having opportunities to progress in an environment that is keeping the ‘hierarchy’ as flat as possible, is a challenge in itself!
Your first few team members are usually the kind of people who can get stuck into a broad range of activities, often making things up as they go along (the environment is ever-changing) and trying various tactics to see what works. When the business gets some funding, your original marketing person, or product person, shouldn’t automatically become head of marketing or the head of product. Instead, you’re likely to want somebody who has been there, done that and knows what great looks like for a bigger company. However, if not handled correctly, those original team members could be left feeling that they’re not good enough and will feel undervalued even if they realise that they don’t have the full skill-set yet. It’s never been a problem before after all.
Distance from the founder
Linked to this, with a sudden influx of new people, particularly at more senior levels, existing team members can also start to feel distanced from the founders. Having spent so long working directly with them, and probably having joined the company because of them, this can be hard to get used to.
So how should founders handle it?
- Communicate the journey: The earlier you start preparing your team for growth the better, so they know what’s coming down the road. Make sure they understand the lifecycle of a startup and your ‘planned’ timescales right from the beginning, so they’re clear what they’re signing up for. Then continue to reiterate these messages on a regular basis, while calling people out for their hard work and the important role they play in taking the business to the next level. Educating the team on the likely journey, their likely feelings, and the likelihood that they will leave at some point and that is normal makes riding the cycle of change far easier - and is likely to retain them for longer too!
- Structure the business for growth: Design and define job roles with growth in mind. So, don’t automatically give your first marketing person the title ‘Head of Marketing’ because that doesn’t give you any wriggle room when you do want to hire somebody more senior. Also ensure that roles and responsibilities are clearly outlined, particularly as new people come in, so there isn’t any confusion about each person’s purpose and everyone can take ownership of their objectives. You can read more about this in our piece on building a winning team, but in summary, each role needs to have purpose and impact, and each person needs to have ownership. If you make those three things clear and clarify the differences in the roles, then bringing on additional team members is likely to be received with gratitude - particularly if they can be involved in the hiring process!
- Honest and open conversations: While the change is happening, keep the dialogue open at an individual level, asking team members how they’re finding things, what they’re loving as well as what they’re liking less. They’ll appreciate the attention and it gives you the chance to nip any problems in the bud before they get too serious. Your ability to be approachable, available and present (emotionally as well as physically) makes a bigger difference than most people assume.
- Development opportunities: Think outside the box to help existing team members to develop, by giving them additional responsibilities or enabling them to get involved in new projects. One way of doing this is by asking them to mentor new people coming in, killing two birds with one stone. Also, try to dedicate a certain amount of your new funding to training and development, so loyal employees feel like they’re progressing, and that you’re investing in their future. To be fair, it is most definitely cheaper to develop than recruit so supporting personal growth with a mentor can be a very effective way of getting insight from those that have been there and done that - without paying the highest of salaries AND still allowing your team members to really step up!
- Autonomy: People hate to feel like they’re not in control of their own destiny, so ensure original team members are involved in any decisions that impact their role. Or, even better, if it impacts their role, make it their decision. For example, involve them in the recruitment of those who are joining their team, so they feel fully bought into working with them going forward.
- Strategic pay rises: You might not have tons of cash to spare, but see if you can give out some targeted pay rises or bonuses when your next funding round comes in. However, remember that it isn’t just the money that shows that you value them, but also a great process that acknowledges their achievements, their growth, their future potential, their behaviour, attitude and values! Also, consider providing a stake in the business by increasing equity as part of the review programme.
Know when it’s the end of the road
You may, of course, reach the point where a team member has been with you for three or four years and is starting to wonder whether they’ll still be employable if they stay. Yes, three to four years is very good retention in startup land! And if they’re genuinely no longer right for the business, chances are that the feeling is mutual - and there’s little benefit in fighting it.
It’s inevitable that most team members will move on eventually, and usually, all you can do is give them an amazing and productive experience and wish them well in whatever they go on to do. Some companies, understanding that opening the door to that conversation early can pave the way to openness and honesty in relationships, raise the issue on day one. Avoiding having a “leaving conversation” as a taboo topic increases the chances of you knowing far earlier.
Most startups want to hire people with a diverse range of experiences behind them, which means accepting that those same individuals are inevitably going to want to move on again at some point. That’s just life, so don’t take it personally. If you’ve given them a productive and fulfilling experience then who knows - one day they might come back or at the very least, be very public advocates for your brand.
Anouk Agussol, Founder and CEO of Unleashed
This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.
We've made buying insurance simple. Get started.
- 08 March 20234 minute read
Five leading incubators at the heart of UK tech
The UK tech startup space is in rude health. Let's meet five of the most significant tech startup incubators helping fledgling UK startups break new ground.
- 22 December 20223 minute read
What do staff want at a work Christmas party?
What do employees enjoy about company Christmas parties? And in a tough economic climate, what’s the best use of your budget? Our survey has answers.
- 24 October 20228 minute read
Small business grants in the UK
Looking for a business grant to get your venture off the ground? We take you through the basics and answer some common questions about grants for small businesses.