Early Stage | <15 employees
As part of the Maturity Framework Series, I wanted to map out a few basic things a startup that is growing from 2 to 15 employees should be thinking about as they grow. We’ll start with taking a look at what should already be ‘figured out’ by the time you reach 15 employees.
Based on the past 2 years of Series A investments, companies at this level usually have team sized between 5 and 15 people. In this outline I assume the company has taken funding, whether Seed or Series A*.
Company Maturity Map by number of employees
Early Stage: 15 employees or less
You’ve been at this for a year or two and you’ve finally made some traction. Your first web product is in market, you have a few thousand customers visiting your website or you just closed your first two deals with big businesses. You’re seeing initial traction and you’re moving as fast as you can to keep the fire burning.
Very few people who work in your company are ‘domain experts’. Some came with little experience and a lot enthusiasm to build something new. Others were overworked at a previous job with little personal meaning, so took a pay cut for the chance to build something that excites them. The skill sets people walk in the door with aren’t necessarily what they are working on. Former lawyers are now operations managers, musicians are managing the community, salesmen are making hires, and that former VP of Engineering is now a full-stack hacker. Everyone is doing a little bit of everything, no one is only doing one thing.
The team fits around one table and if you need to talk to someone you just turn around and tap them on the shoulder. You don’t need to over-engineer systems to share information because everyone can overhear every meeting in the small office. Even the CEOs phone calls with investors are heard through thin walls and headphones.
You may have some of the best engineers but there’s a lot of ground to cover. You find out about bugs in your code from your friends who are using the ‘beta’ or getting a tweet from someone trying to login. The site was down for 30 minutes and you just realized there was an error in that last push. Everyone jumps in to help out. Someone is reviewing the log files. Another engineer is pushing code. One of the co-founders is testing the website on 3 different browsers to ensure the bug was fully fixed. The CEO is reaching out via Twitter to thank the customers and assure them the site will be back up soon.
This group of friends and new faces are building something that is bigger than they imagined at this size, but still feels like a spec compared to the other ‘startups’ out there. It’s exciting and chaotic but you wouldn’t want it any other way.
Current state of the organization:
- Everyone in the company knows everything going on.
- Founder or founders are usually doing a lot of different things.
- No specialization, anyone can, and does, do anything.
- You’re building out an idea, not necessarily a company yet.
- You’ve pushed a real product to real customers (not just friends).
Things you’re doing for the first time:
- Figuring out role requirements for the next set of hires
- Learning the nuances of interviewing
- Deciding if you’re open to ‘remote teams’
- Defining your ‘vacation policy’
- Adding “Terms of Service” to your product
- Putting together a board deck
- Setting up one-on-one meetings between Execs & team
- Having regular meetings with the whole team
- Right sizing equity and compensation
- Deciding on Security of employee equipment (2-factor auth)
- Figuring out what type of coffee machine to have at the office
What you’ve already solved:
- Investors and immediate runway
- Founders: who they are and what they do
- Domain name, company name, vision
- Filled 60% if not more of the board seats
- Company structure: likely a C-Corp or B-CORP
- Working location: office or coworking space
- Business banking — a professional account, not a personal one
- Technology stack — dominant language
- Milestones you’re going to accomplish in the next 3 months
Software you use:
- Payroll — JustWorks, Paychex, ADP or Zenpayroll
- Benefits — JustWorks, or Zenefits
- Accounting — Quickbooks, Intaact, or Netsuite
- Google Apps for email and documents
- Dropbox if not Google Drive
- Google Analytics for web (free tier)
- Flurry Analytics for mobile (free tier)
- AWS or at the verge of outgrowing Heroku
- Mac books (possibly through business financing)
- Zendesk or Desk for customer support
- Social media is manageable so no tools
- Sticky notes on a wall, Trello or Asana for Product Management
- Permissions & software sharing: Github
- Careers 2.0 and Indeed to hire outside of your network
- If accepting payments, Amazon, Dwolla, or PayPal
Who you need to know:
- Local co-working spaces to house your growing team
- Real estate connections for your next office
- Lawyers to get your documents in order
- Local meetup organizers who will let you demo at the next event
- Journalists, via Twitter or friend-of-a-friend, to write-up new features
- Skilled friends who may be looking for a ‘startup job’
Additional decisions that may start in this stage:
- Having multiple offices or remote employees
- Hiring outside or in-house council, for more regulated industries
- Negotiating a lease on a new office
If you have something to add to this list, please share in the comments or send me a line on Twitter.
Next up, Momentum Stage, going from 15 to 30 employees. To subscribe to updates via email, sign up here.
*Please note, this outline is based off of trends I’ve seen in venture-backed startups. It very easily could apply to bootstrapped or non-venture funded companies, but not necessarily.