How To Organize Your Startup Team For Success

Solutions to common team-related startup growing pains

Say you’re building a company that has the potential to solve a significant problem, or perhaps even change the world. Your minimum viable product is slowly developing from something purely functional to something user-friendly. You’ve tested the waters in a specific market, and it is looking promising. You’ve managed to hire some incredible talent to help your company grow. It sounds like you’re on the right track. Sadly, research has shown that 90% of startups fail. As a startup founder, that statistic can seem pretty frightening. The success of your startup is highly influenceable by your decisions. The following formula is useful to have top of mind at all times, as it carries the most essential ingredients for success:

There needs to be a desire (market) for a solution (product), and you need people (team) to build the product and ensure it lands in the market.

Without a market, even an excellent product and a stellar team will not get you there. Nonetheless, 60% of startups fail due to team-related problems. Considering you have managed to find a strong market in combination with having built a great product, whether you’re able to cultivate a high-quality team could make the difference between your startup succeeding or failing.

As a startup, you often can’t afford to waste time and money. It is, therefore, crucial to provide a setting where your people can work and collaborate as effectively as possible. As straightforward as this may seem, many young companies struggle with creating such an environment. Hiring a bunch of talented and passionate people and putting them into an office with a ping-pong table and fruit-infused water does not suffice to make your team operate as a high-quality team. Especially once your startup grows beyond ten employees: the more people, the more complexities arise.

In this blog, I will elaborate on three common problem areas (in no particular order) which I have experienced to cause friction regarding nurturing a great team:

1. Strategy & Objectives
2. Roles & Responsibilities
3. Time & Money

I provide recommendations within each of these problem areas so you can be one step ahead, and prevent your startup from failing due to team-related problems.

Problem area 1: Strategy & Objectives

Although it may seem straightforward in theory, amid all the chaos that comes along with building a company, the topics of Strategy and Objectives are often neglected for too long in practice.

As a leader at a startup, it is easy to get sucked into the day-to-day of running the business and extinguish one fire after the other. If this happens for too long without taking time for high-over strategy moments, this can be very dangerous. If the leadership is uncertain or misaligned on the strategy or objectives, this will ripple down directly to the employees. Misalignment will cause a lack of focus and poor prioritization, which is destructive for making the speed that you need as a startup.

Once your business has reached product-market fit and your team has grown to more than 10 FTE, a system like Objective Key Results (OKRs) can be helpful to align your team towards a common goal. OKRs help to translate your strategy and objectives into measurable focus areas and make it clear for everybody in the team how they can contribute to the success of the business. OKRs help to prioritize and cut out everything that is not important enough and minimize ad-hoc tasks.

Setting OKRs can be a tedious and challenging process, but once you have made an effort to set them up firmly, they will undoubtedly serve the business well in the long term. It could be useful to develop your OKR’s alongside a growth model, as it can help you discover what inputs you need to work on to reach specific goals. Read how to create a growth model here.

It is vital to reassess your strategy and objectives regularly. Schedule in time where you take a step back to update and review your growth model, tune in to the bigger picture, and ultimately set new OKRs for the upcoming quarter. Do a Four Fits analysis every quarter to map out whether there are any changes in the market, new competitors, changes in regulation, etc. Ask your product or customer relations team to provide a high over analysis of recent customer feedback. Use these as inputs for your strategy and objectives for the next period.

Problem area 2: Roles & Responsibilities

Secondly, in an early-stage startup, it is common for team members to take on a multidisciplinary role. Tasks and responsibilities are often not clearly defined, as the needs of the business change rapidly. A flexible mindset and skillset are desirable for team-member to have in such a phase. Those who choose to join a startup early need to be comfortable with the risk and thrill of not knowing whether the company will still be around in 6 months. Many who join a startup team enjoy to pioneer alongside the founder(s) to build something successful from scratch.

Once you grow beyond the initial customer development phase and need to hire more people, however, things can get tricky when responsibilities are not clearly defined. Defining responsibilities starts in the leadership team. If responsibilities are not clearly defined there, this will spread to employees and give rise to a diffusion of responsibility. Besides making it clear what team-members’ day-to-day responsibilities are, break down your OKRs and assign ownership to each Key Result.

As a startup changing into a scale-up, your company can be going through several transitions in a short time. Organizational change can trigger feelings of discomfort and uncertainty amongst the team. Roles and responsibilities are frequently in need of reshaping. Also, every influx of new employees can make the dynamics become different overnight for small teams. For example, to those who used to be able to discuss things with the founder multiple times per day casually, it can be frustrating that now they have to be pleased when a meeting request is accepted.

For some, it can take longer than others to adapt to these kinds of changes. Not every person suits every phase of a young company. A later stage often calls for more specialists to bring the company to the next level. Besides hiring new specialists, foster a culture of learning, and stimulate your existing employees to learn new skills, so they too have the opportunity to take on more specialistic roles. Also, as a seasoned entrepreneur, never become arrogant and think you have nothing more to learn. In this fast-paced technological era, a Growth Mindset is more important than ever to thrive. Keep reading and learning, talk to others in the field, talk to your customers, be open for advice, and know when to ask for help.

Especially in times of organizational transformation, structure (for example, through OKRs), clear communication, and having regular 1–1s with employees is fundamental. Make sure that when colleagues raise issues or frustrations, truly listen. Follow up on issues and manage expectations if you cannot resolve them soon. 75% of employees quit due to things their manager can influence. Employees talk to one another, which is crucial for collaboration. However, if they feel their company-related issues are not dealt with properly, they could start to confide in each other. In bad cases, employee dissatisfaction could spread like wildfire, and this is the last thing you need as a growing company. There are also tools out there like Officevibe to help catch bad vibes early.

Problem area 3: Time & Money

Thirdly, the interplay of time and money often brings about tensions in a startup. You need to get high-quality shit done in as little time and for the lowest costs possible. You want to impress potential investors for a new round of funding. While, at the same time, you want to keep your team highly motivated and effective, and stay on track for reaching your bigger mission.

What I have experienced at several startups, is that this pressure of time and money is felt strongly by the leadership team, but not always fully embodied by the employees. When you keep employees out of the loop of the company’s most important objectives, they have no choice but to fill in the gaps for themselves. If only being told to work harder and faster without understanding why, employees may start to think their leaders no longer care about the quality of the product or the original mission of the company. They can become skeptical towards this pressure to work extra fast, which could trigger resignation.

For example, product people inherently want to build products people love, so they tend to become uncomfortable when pressured to make something so fast that it ends up containing many bugs. To change their feeling of discomfort, they are prone to either try to convince leadership that this low-quality is undesired or leave the situation altogether and resign. To prevent this from happening, manage their discomfort by establishing a ‘sense of urgency’ upfront alongside clear company-wide goals (OKRs). If a temporary bug-filled product is the best way to reach the objectives within time, the product employee will better understand the reasoning for this chosen strategy. (Recommended read: A Sense of Urgency by John P. Kotter)

If your team needs to work hard to meet targets for a new investment round, and this is critical for the company to survive, then translate these investor targets into OKRs. Monitor the progress of OKRs and team performance through frequent check-ins, and keep reinforcing that sense of urgency.

Existing investors can be very demanding about seeing specific results within a short time. However, they can lack the understanding of what their demands mean in reality. For example, requests that require a working pace so fast that it would negatively impact quality, affecting both customer and employee satisfaction. Even though you may be dependent on investors, always stay critical and evaluate whether their demands are realistic and beneficial for your company and vision on the long-term.

7 tips to sum up this article:

As a leader at a startup, you are likely up for a rollercoaster journey: unable to predict many of the things that come across your path. In spite of that, you can influence the chance of your company becoming successful through ensuring your team operates as effectively as possible. To summarize the article, I leave you with these seven recommendations:

1. Use a system like Objective Key Results (OKRs) once you’ve reached product-market fit to align your team towards a common goal.
2. Translate investor targets into OKRs, and tie Key Results to team member’s responsibilities.
3. Ensure responsibilities are clear, especially amongst the leadership team.
4. Reassess your strategy and objectives every quarter: set new OKRs and do a Four Fits analysis.
5. Embed a Growth Mindset into your culture to keep up with the advancing world.
6. Have regular 1–1s with employees, especially when the organization is changing.
7. Even though you may be dependent on investors, always stay critical.

All the best!