What to Consider When Growing Out of a Startup and Into a Midsized Business

The jump from a startup to a midsized business is often a tough one for many entrepreneurs. When you are a startup, you are deeply immersed in the many tasks and projects that come with bringing your ideas to life. Between design, new client acquisition and assembling your team you’re not necessarily thinking about what will happen in the future- if you don’t get done what is right in front of you, there won’t be a future.

The Core Team

At first, work is often done at a single table (virtual or physical) where you closely interact with your growing team. This can be a very exciting time in your startup as problems are fresh and new. Everyone works together, actively trying to find solutions to obstacles that pop up. Resources are used to target specific flaws and allow your team’s capability to significantly increase.

The more you and your team navigate through these growing pains, the better you will become at pinpointing one another’s strengths and weaknesses. After a while, your group will begin to feel more like a close-knit family: small and very tightly aligned.

Like any family though there are ups and downs. You should avoid “yes-people,” instead, seeking out those who have skills you don’t and who regularly question the norm.

Experts Become Leaders

Continuous growth will change the once small, intimate collection of people you started with, into a “group,” or even a “company,” with additional members. You’ll find that you’ve quickly moved from a tiny startup in someone’s basement or warehouse office, to a decently sized business.

This development means that you will need to figure out a way to get 8-15 people (who are rapidly becoming “specialists”) to fluidly accomplish what three or four “generalists” have done in the past. During this period, adding a new person takes the load off of another who is already doing the same work.

Each additional person does not amplify your group’s skills (as much as it did when you were a startup), but it does expand the complexity of management. You should look for people to scale and leverage what has been learned- ones who are able to effectively repeat this information back to others.

Communicating Your Values

With your small incubation team working at the same table, communication came easy. When you expand your team to 3 or 4 times your original size, space at the table becomes limited. The one common area that once fit every team member will not suffice anymore.

Instead, being on the same page becomes harder and so does everyone’s understanding of what each person is doing. The manner in which these groups continue to communicate despite the division is key. How can you introduce new processes without adding bureaucracy?

Codifying your values, mission and focus may sound like the last thing you need to do when you are transitioning into a midsized business, but it is critical for your growing group to know what priorities drive your objectives. Don’t continue to merely lead by example; demonstrate to your employees that you care and are willing to invest in their growth by coaching and providing opportunities.

Organizational decisions can slowly take your focus off the client and the market; what was initially perceived as a quick fix around the table isn’t resolved as easily with an increase of staff. People spread out, different priorities arise and confusion starts to build.

Don’t let a business model pivot overturn all the hard work you’ve built from your early startup days. When you have the correct team and methodologies in place, your employees will not find change to be difficult or overwhelming.

What difficulties, or benefits, did your business experience when transitioning out of the startup phase? What strategies did you implement to guide your team through this period of time?

– Mike

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