January 17, 2021

4 lessons on Scaling Your Startup Team

We are often asked how we came up with the idea of Billy and why we started making such a product. In this article, I will answer this question and tell you about the lessons we have learned in as much detail as possible.

This article will be useful for the founders, CEO / CTO, and HR managers of companies (mainly startups) in which the number of employees is actively growing or will do so soon.

My name is Inal, and I am the founder of three startups with different paths (including Billy) and a person who has worked for five years in total as a hired employee in two more companies experiencing active growth.

šŸ¬ A bit of context

Billy's story began almost five years ago when my co-founder Elena Kaminskaia and I were co-founders of another startup. We made a product for organizers of various events - from concerts to educational courses - to make an all-in-one solution. The product allowed you to start by creating a landing page, sell tickets, integrate with social networks for advertising, and even had a simple CRM.

The business was going quite well, so we grew from four co-founders to 22 people in six months. But after a year and a half, we realized that we were working in a team where we feel uncomfortable, and we didn't like the culture at all. This was expressed in the values of employees, their motivation, and the fact that in the overwhelming majority of cases, it was up to us to explain what is "good" and what is "bad." After a while, we left our own startup for this reason.

The culture in the company could easily be called "toxic".

When we started working in a new startup as ordinary employees, there were 30+ employees, but over the next 9 months, the team grew to 200 people! Such rapid growth never goes unnoticed, and at the new place of work, we began to notice the same problems in the team - lack of understanding of culture, different values, communication issues, etc. Elena and I realized that problems with culture in companies are widespread, but it is often not clear how to solve them or even how to measure the company's state of culture.

We devoted the next two years to this in interviews, research, discussions, and collection of best practices, which resulted in Billy.

Below I will tell (finally!) what four lessons we have learned for growing teams from our experience and what you should remember if you have a growing startup.

šŸ—ļø Restructuring your team as you grow headcount

A change in the structure must always accompany the growth of a company - teams and their composition must change. An organizational structure that works for small companies rarely works for medium-sized ones. The idea may seem obvious to some, but very few teams make a dedicated effort to change the teams' processes.

Let's take an example of what happens to many teams as they grow. For example, Amazon has a famous rule that the team's size should be no larger than you can feed with two pizzas. Our research also confirms this rule of thumb - as soon as any team or sub-team exceeds 8 people (the magic number, not otherwise!), the manager ceases to cope with communications. According to our statistics, about 80% of a successful manager's time should be spent on communicating with the team, and if the team is too large, this time is not enough for everyone.

Managers and founders often are afraid to split teams into smaller units / sub-teams as they grow. It may not be easy at first, but then it will pay off in full. It's almost always worth it, so my advice is simple ā€“ change the company's structure, experiment with it, and don't be scared of changes; you can always fix it.

When changing teams' structure, it is worth paying special attention to how communications work in new departments. There are useful tools to analyze interactions; simple communication facts are often enough, but some tools offer deeper analysis.

āœŒļø Creating and Maintaining Company Culture as you Scale

One of the most important characteristics of successful companies is a developed corporate culture and decentralization. Very often, in small startups, the founders are the carriers of culture and values. With the company's growth, it begins not to be enough to project the culture to all employees, show by examples what is good, what is bad, what is important for the company, and what is not.

It's good when the company's core values are written down and visible to everyone, but this is not enough. It comes as a surprise to many founders that values are interpreted differently by different team members. This problem can be solved only through examples, explicitly and publicly showing and rewarding employees when doing things right.

It also helps to increase the number of "values holders" and allows for decentralized governance. Gradually, managers and the most active team members also begin to highlight good behavior and encourage "good behavior publicly." In the article on "5 reasons why appreciation and recognition help companies grow their revenue", we talked about how employees show what is important with simple and quick actions like emoji/reaction, but often recognition must be even more explicit

Expressing what is good and what is bad helps a growing team to shape and develop culture.

šŸ‘ Employer Branding

One of the biggest challenges when working with a growing team is the right recruitment of new employees. There is a common misconception that the employer's brand (aka HR brand) is important only for large corporations, but it is absolutely not the case from my experience. You don't want to start hiring "rock stars" only when the company gets big, do you? You want to do it now, and you need to build an HR brand now too. Only a strong HR brand will allow you to get the best talent for less money.

I have been working in developer relations for several years, and one of our main tasks was to improve the HR brand. You can do this from different angles - have a cool and rapidly growing product or company, constantly be presented at events, or raise funds from the biggest VC funds. However, the most important factor will still be what your current and former employees say about your company.

Constantly measure the state of the company's culture, staff motivation, evaluate communications using data analysis from instant messengers. Managers and HRs need to keep their finger on the pulse all the time.

And just as important, constantly collect feedback from your employees, current and former.

šŸ”— Building Pipelines and Processes

In the previous section, we talked about the fact that your current and former employees' feedback is important, but in fact, it is also important what the people who have entered your hiring funnel say. To ensure that all candidates are happy, even those you don't end up hiring, you can do a few simple things:

  1. A standardized hiring process so that everyone is asked roughly the same questions. It will also help you compare candidates and actually choose the best.
  1. Ensure that there are always several people during interviews. The "human factor" is critical.
  1. There should always be leaders in interviews, and this is not so much about formal leaders as about leaders who can project team values to potential employees.

In the first periods of a startup's life, when there is a question of survival, it seems logical to always hire people with the necessary skills and not necessarily with the 100% cultural fit and shared values. Still, as the team grows, it will be necessary to hire only people with the same values as your team. For example, your employees must understand that a startup can pivot from time to time, and pivots are normal.

Don't be afraid to fire people who are with you from the start but no longer fit the team's culture

The last piece of advice is hard-won from my own experience - we suffered for a year with one employee who did a lot of things and was aware of everything in the team. Still, everyone else around him was always unhappy and suffered because of "toxicity." As a result, getting rid of such a toxic person increased many more people's productivity than this one employee did.

Inal Kardan

Inal Kardan

Co-founder & CBDO at Billy App. Iā€™m excited that I can combine my engineering degree and my experience building teams to develop new technologies for teams