Startup growth, at Imgur
The term “startup” has been thrown around with such frequency that it’s hard to tell what it means anymore. People use the “S” word to describe everything from single person LLC’s to ten plus thousand employee corporations. So, what is a startup anyway?
Luckily, Paul Graham has pretty much solved this debate for us years ago. If you haven’t read his definition of a startup before, I suggest you do. He explains:
A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of ‘exit.’ The only essential thing is growth. Everything else we associate with startups follows from growth.
I also really love Adora Cheung’s, cofounder and CEO of Homejoy, definition though, as it applies more to the people who join your startup:
Startup is a state of mind. It’s when people join your company and are still making the explicit decision to forgo stability in exchange for the promise of tremendous growth and the excitement of making immediate impact.
By this definition, startups are unstable, and employees sacrifice stability for making an exciting and big impact.
Those two definitions compliment each other quite well, because I believe part of what makes a startup unstable is either lack of growth, or too much of it. A startup is a company designed to grow fast, and because of that fact, it’s inherently unstable. To continue to go off of Paul’s barbershop example, if a barbershop had 25 customers per day over the last 6 months, then you've got yourself a pretty stable and predictable business. However, if somehow the shop was getting more and more customers every day, then every few months, or weeks, everything would have to change in order to support the growing clientele. That’s not so stable (but exciting!). Basically, if you’re not ready for some wild and crazy changes while you go through a company’s growth stage, then you don’t have the startup mindset.
Paul Graham also explains that the growth of a successful startup usually has three phases:
- There’s an initial period of slow or no growth while the startup tries to figure out what it’s doing.
- As the startup figures out how to make something lots of people want and how to reach those people, there’s a period of rapid growth.
- Eventually the successful startup will grow into a big company. Growth will slow, partly due to internal limits and partly because the company is starting to bump up against the limits of the markets it serves.
We’re going through the rapid growth period at Imgur, particularly internally. After five years of growing all the way to 100 million unique visitors, we only grew internally to 12 people. Eventually, we started having to pass up too many opportunities because we simply didn't have the employee bandwidth to go after them. I knew we had to start growing internally to support our external growth. Why didn't we just hire more people earlier? Well for one, it’s hard, and (for better or worse) it was easier to focus on the product. For two, we were bootstrapped, and even if we were able to find more people, we were limited by our revenue.
That changed last year when we raised our $40 million series A. What a time to be alive! The first thing we started doing was hiring, and exactly one year later, we’re up to 47 people. Almost quadruple the amount and an average of 3 people a month. Not bad. However, it turns out that a 12 person company is vastly different from a 24 person company, and is even more different from a 47 person company. It seems like things are completely changing every 3 months, and in fact, they are. We aren't stopping either. By the end of this year, we’ll be up to 90 people which is finally what the product deserves, at a growth rate that is realistic. However, with that comes a great amount of instability. Things are going to change even more, and employees and investors need to embrace that fact. After all, instability is in our definition. Along with growth, it’s what defines us.
When you grow this fast your processes break down and need to be changed, communication among the company gets harder, people will develop conflicting goals, you’ll get pushed and pulled in so many different directions you may not know what you’re doing anymore, there will be more meetings, more opinions, more products, more interviews, more arguments, and more stress, all with less time. It’s hard, really hard, but this is what it means to be in a startup, and if it’s successful, it will all be well worth it.
When we first started growing our employees I was scared. I would often think, “if we had more people, what would they do? Is there really enough work?” (In fact, my mom still wonders why we have any employees at all. “It’s just a website, isn't it?” JUST A WEBSITE?! C’mon, Mom!) The answer, however, is always. There’s always enough work as long as you hire driven, motivated, and smart people. They will always find work and always find things to improve. Unfortunately though, it’s tough to hire just a bunch of smart people and have them do whatever they want. You need a structure, priorities, they all need to be moving in the same direction, and above all else, you need vision.
At Imgur, we need a solid product that works on various platforms, so we’re looking at iOS, android, frontend, backend, and devops. Those products need to work and look great, so we have product management and design. We need great content and a great culture on Imgur so we need a team for that as well (our community team). We need to make money, so we have sales and ad-ops. We have to spread the word about the stories that people are sharing from the community, so we have PR. We also need the standard operating teams such as legal, finance, accounting, and HR. So, as it turns out, it’s incredibly easy to have a small startup that needs a ton of people for a seemingly simple product.
After a while, these teams will grow and become too hard to manage. Jeff Bezosis’ “two pizza rule” is so accurate it should be a law. That is, any team should be small enough to be fed with two pizza’s. If it can’t be fed with two pizza’s, then it’s too big and should be broken down. For Imgur, this means about 7 people (everyone gets about two slices). I also believe that teams should be run like startups. There should be a single lead, and they should have all the resources they need to be successful. For products, this means you have typically have a PM, a few designers, a few developers, and the team lead is usually technical and drives the success of the team. These teams are also “mission based” teams, where they have a single mission, or goal, that they go after relentlessly. They should be focusing one hundred percent of their time on achieving their mission, and they have all the tools they need in order to do it. The bigger the company, the more mission based teams you have, and the more specialized they are.
Over the next few months, our one collective goal at Imgur is to “focus on the basics”. This means five specific things for us.
- User on-boarding and first touch experiences
- Basic user retention practices
- Understanding our users through data
- Ensuring that we have quality content, and incentivizing more of it.
- Internal culture and hiring
Right from there we have five, temporary, mission based teams. Currently, objectives 1–4 have two full stack developers, one designer, and one PM. Unfortunately, our mobile teams are too small in order to do this yet, but soon, we’ll put mobile developers on those objectives too. In fact, no matter what we do in the future, we know that we will always have defining objectives that roll up to one main goal, and each defining objective is a opportunity for at least one mission team. Actually, each defining objective could easily have many of it’s own objectives that require mission based teams.
At the end of this year our goal is to reach 90 people which come from the following teams: android, ios, frontend, backend, devops, sales, marketing, ad-ops, creatives, pr, design, product, analytics, machine learning, performance, community, support, legal, finance, accounting, hr, recruiting, partnerships, and administrative. Some of those teams are just one person, and some are a dozen people. Many are also cross-functional and form mission teams that focus on just one objective. And who knows, next week we may discover that we've overlooked a team and need to add one more, and a year from now we’ll definitely have many more teams. Some companies are so big that they've grown teams specifically for the purpose of hooking up internal teams to other internal teams because they have a hard time keeping track of all of them.
So you can see that if you setup the right structure and priorities, the company could easily grow to hundreds of employees composed of many small teams. It’s easy to wonder what people are for when you look at the company from the outside, or even within your own team. But when you look at it as a whole and in terms of teams instead of people, where each team is responsible for it’s own small mission, you realize that it’s actually pretty complex and can grow very large.
I've found that instability from growth comes in waves. All of a sudden you’ll find your old way of doing things isn't working anymore and your employees are pissed. So what do you do? You create a new process and you have lots of coffee dates! That’s what. And if you’re lucky, it will work. Then one or two months will go by and you find that people’s roles have shifted, you have people fitting in where they weren't before, you have a new product, some new SaaS system, and another broken process that you just thought you fixed. Look on the bright side though, you probably have someone to fix it for you by now!
I don’t know what waves we’ll go through, how many, or how often as we continue on with our destiny, but I’m looking forward to the change. Change is seen as a dirty word, but personally, I’m searching for it. “To improve is to change; to be perfect is to change often.” — Winston Churchhill. I plan on willing this company into success, if nothing else, and that means we need to change and make a lot of things better. We’ll do this fast and often, and we’ll make mistakes along the way. That’s ok though. We’ll find the mistakes and we’ll fix them, and continue to attempt perfection in an inherently unstable business.