Maturity Map— Scale Stage | 75–150 employees

The most common questions I hear from startup founders and team members are, “What are the best practices? What lessons have others learned? What’s coming next?”

The purpose of the Maturity Framework Series is to help startup founders and teams to anticipate what is coming next. This post will specifically look at the Scale Stage, when a company grows from 75 employees to 150.

Company Stages by Number of Employees

Links to full posts detailing the Early Stage, Momentum Stage, Expansion Stage, and Growth Stage.

Scale Stage: 75 — 150 employees

Getting to 75 employees happened before your brain could process it. This is often the case, you plan to grow slowly and then within a short period of time you add 30 new employees in less than 6 months. Welcome to the scale stage.

Your company is at the point where you know what your mission is, you understand your market and the most important piece is serving more customers faster. Your teams will grow quickly with more experts in the areas you need it. This is no longer a mystery, but it’s growing existing teams to have more manpower.

The skills required of your team are changing, make sure to let the team mature. The shifted demand for experts may mean a number of early employees are leaving. That’s not a reflection that you’re doing something wrong, that’s a natural shift. Some people prefer smaller teams, others want to change the work that they’re doing. Prepare your process to help employees who are exiting, including exit interviews and a standard for equity execution plans. An informal poll of our portfolio companies that less than 5 of your first 20 hires will stay with the company beyond 100 employees.

You will need more leaders, managers and reporting structure. This doesn’t require you to set up a bureaucratic process. It does require providing enough structure that each member of your team can focus on doing their best work, not worrying about who owns what project or where they should take feedback. Imagine it as building a map to a new town. When it’s two houses, it’s easy to find your way, when you have 20 houses, you’ll need an easier way to identify where people are and what they are working on. Since you’re adding employees quickly, that organizational structure will help new hires even faster.

Focus should continue to dictate what gets prioritized. Make sure the senior leadership team you’ve built understands that and doesn’t get lost in defending ‘their turf’. Another risk is making sure leaders are empowered to provide the CEO with honest feedback. No single person in the company will know everything going on, trust, communication and transparency are key.

Current state of the organization:

• You’re building out a matrixed organization under your new executives
• Meetings: weekly one-on-ones, weekly senior leadership discussions, townhalls
• Founders are focused on growth
• You’re raising your Series B, C or D
• You have analytics in place and a real amount of historical data for comparison
• You’re finally making decisions based on data
• More management brings up questions around career progression
• Your office is likely bursting so a move will happen in this stage
• You know the board and are better at utilizing them as a resource
• You bring executives into board meetings, less is presented by the CEO
• Revisit your mission, vision and values — make sure you stay focused
• You’re likely known in your market or a larger business market, you have a reputation now- make sure you know what it is

Things you’re doing for the first time:

• Creating more robust reporting structures under new executives
• Retitling, especially if early titles were inflated
• Increasing communication to give ‘new folks’ the same access as ‘veterans’
• Raising your Series B, C or beyond, being mindful not to get too far ahead of your valuation as it may limit future round sizes
• Restructuring your team (again) around new management
• Increasing your data infrastructure to help departments make decisions
• Having policies and protections in place to prevent employee security breaches
• Your infrastructure team now has some time to tackle some of the backlog
• Negotiating a new option pool to continue to provide equity to those who are close to vesting
• If you offer meals, figuring out how to feed 100+ people at scale
• Building your sales team to feed the revenue machine
• You’ve recently hired a Head of Product or you will in this stage
• Tools are up for debate as sales, marketing, product and engineering all want something different
• You have recently hired or are hiring a second office manager to keep up
• You’re figuring out how to handle equity grants for employees who leave
• You may have reached sustainable profitability with enough growth capital to continue, figuring out where to invest becomes crucial

What you’ve already solved:

• What the company is solving: stake in the ground
• Key OKRs
• Testing revenue models
• Milestones you’re going to accomplish in the next 6–12 months
• Understanding the largest opportunities and the biggest threats in your market

Software you use:

• Payroll — ADP or TriNet
• Benefits — Private broker
• Accounting — Intaact, Netsuite or a third-party accounting firm
• Google Apps for email and documents
• Dropbox or Box
• Google & Flurry Analytics plus MixPanel or Localytics for data
• Using Hadoop, Redshift and Tableau for data
• You’re starting to build your own data tools
• AWS or your own servers
• Zendesk or Desk for customer support
• Sprout Social or Hootsuite for Social Media
• Jira for Product Management
• Github for permissions & software sharing
• Salesforce CRM for your sales pipelines
• Careers 2.0, Indeed and external recruiters to hire outside of your network
• Stripe and Dwolla for payments
• Skype, BlueJeans, Zoom.us (http://zoom.us/) or Google Hangouts for remote meetings
• Hiring Platform: Lever.co, Greenhouse.io or BambooHR.com

Who you need to know:

• Catering: ZeroCater, Food2Eat (links) or an in-house Kitchensurfing chef
• Recruiting firm for executive hires
• Management training coach
• Lawyers to review equity documents & update the cap table
• Journalists you’ve built relationships with to write-up new features
• Skilled friends who may refer top talent to your company
• Mobile platform gatekeepers to promote you in their stores
• Full time accountant to manage books
• 409a consulting firm to evaluate equity
• Specialists in SEO, SEM, PR, Marketing and Branding

Additional decisions that may start in this stage:

• Having multiple offices or remote employees
• Offering your product in more than 5 languages
• Securing visas for international candidates
• Hiring outside or in-house council, for more regulated industries
• Negotiating a lease on a new office
• Hiring a white hat security firm to run an audit
• Opening an office in a different country
• Accepting foreign currency or cryptocurrency
• Hiring an external CEO candidate

If you have something to add to this list, please share in the comments or send me a line on Twitter.

Next up, the Dunbar Stage, growing a team beyond 150 employees. To subscribe to weekly email updates, sign up here.

Footnotes:

*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. In this outline I assume the company has taken funding.

**We’ve invested in a number of companies mentioned in this note. For a full list, visit our Portfolio Page or find opportunities with them through the USV jobs page.

Originally published at www.brittanymlaughlin.com.