Now comes the hard part: Developing hierarchy in a growth stage startup

Mike Salguero

One surprise that you discover when running a business is that success leads to new stages of growth. It is during these moments of scaling an organization that you realize that you need to completely rethink the strategies that got you there.

Often, companies need to be transformed into something wholly different from what they previously were. In most instances when as business needs to “scale,” as they say, the team is likely already behind where it should be in this growth process.

Take, for example, the transition from an early-stage startup to what’s called a growth stage business. This is the period when a small group of founders and early employees have done well enough to need to add more operational constraints on a business. Roles get more defined and holes in the company’s structure get filled.

Without anyone telling you, you need to evolve from a company that values hustling and hard work — all while trying to to find its market and customers — to an organization that needs to maximize both its people and its finances.

The best way to explain this evolution is through one of my favorite allegories to explain how we’ve built ButcherBox so far. The way I see it, building a startup is like a team of adventurers making its way through the jungle towards some group achievement. You have an idea where you are going, but more often than not, you are hacking your way through as best as you know how.

It’s great to work with incredible people at this stage. You are all in it together; someone takes a leadership role for various phases of the expedition, and there are no egos involved. You are all having fun, taking enormous risk together, knowing something great awaits whenever you reach whatever the destination may be.

(This is a little easier if you’ve already done the startup thing once before, as I have as a co-founder of another early-stage venture, CustomMade. But, it’s not a huge advantage if you are also in a vastly different industry. Getting back to the analogy above, it’s like before you have to go off hacking through the jungle, you’re allowed to climb an observation tower to give you a hint about which direction you should start trekking in. But the actual journey is still through new terrain, and, the challenges posed are just as unforgiving.)

And then you do it…You hack your way through the jungle, and you hit a dirt road. And then you realize that now you need a someone to lead those same machete hackers to drive cars to the next destination. You also now need a lot more cars and drivers on that road, and, oh yeah, you need someone to help you fill all these suddenly vital new roles.

While the idea of adding 10 to 20 new employees to an organization may not seem like that overwhelming a task — large corporations do this nearly every day — the implications for small businesses cannot only be disruptive, they can often cripple an organization.

And we’ve seen it happen time and time again.

Right now, we are currently undertaking the task of growing while bootstrapping. This is a dramatically different experience than scaling after taking institutional funding and having a board of directors interested in the day-to-day operations. For one, we are deciding on our own when and how to evolve as an organization; which is a great thing.

Here are a few key things we’ve done to survive to this point:

-We hire for experience. We’ve done this by bringing in key people for important roles as we’ve grown.

-We hire for cultural fit. To do this, the number one quality we screen for in new hires is humility.

-We hire opportunistically. Oftentimes, we take risks on people that others may have passed over.

So now we are at the point where we have been hacking through the jungle for two years, and then…Boom! Now we are on this road that we have to figure out how to navigate.

We need people with different skill sets for some of this growth, and we also need to figure out how to help the team while transitioning to the next level.

For me, the current challenge is adding more “hierarchy” to what has previously been quite successful without having had to focus too much on who stands where in the organization and what roles need to be changed.

There is a lot of nuance to doing this correctly, but I believe that the team we’ve built understands and is ready for this next stage of development for ButcherBox.

I know I’m ready to see where this road takes us from here.

Mike Salguero is the founder of ButcherBox.

This post first appeared on the ButcherBox blog, Roam. If you want to subscribe to ButcherBox, click the banner above.

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