Scaling up from a small startup to a medium size company can be as nasty as getting through puberty.
Reminiscing this time in Creamfinance, we experienced such an episode after raising a seed round and the company started expanding in three new countries and increased headcount seven times and became the fastest growing fintech company in Europe.
The situation was fairly classic – our startup consisted of some 15 people, most of whom were enthusiastic guys and girls in their early 20ies (me included) with little or no professional business experience. We were very close, hung out together, solved problems together and did our best to grow the business with very limited resources. But once the resources got bigger (EUR 0,5mil seed round) and growth escalated things changed.
Within months, the original team could no longer keep up with the complexity and demands of the company. And the company could not afford to wait. So from being proud of close to zero employee turnover, within four months almost all of the original 15 people were no longer in the company. A few got fired, several left because they missed the good old days, one started a rebellion and tried to get the remaining staff members to quit and one offended me personally through social media for being a “heartless green prick”.
It was difficult for everyone and it was certainly not pleasant for me as a co-founder. However, I learned a few things which all prove that progress comes at a cost.
- Do not confuse passion and enthusiasm for experience and competencies. Trying to get unexperienced, low-qualification enthusiasts to do complex business functions is destined to fail.
- In a high growth company, the needs of the business change constantly and therefore the key role of a leader of an organization is to keep the standard high and allow only the best people work in the company.
There are no visuals to capture this situation. Why? In the first years of the company we did an all staff picture every 6 months but during this period of rapid change it started feeling awkward. Every week someone from the picture would no longer be in the company until over 90% of the people in the picture were no longer there. Hence, the last conclusion – don’t do all-staff pictures when implementing major change in the company.