Growing a small company into a medium-sized company is a lot harder than it sounds.
Over my career I’ve worked at both small companies (with less than 50 people in a single office), and huge companies (with multiple offices and more than 10,000 people worldwide). Both have their pros and cons, as well as their particular frustrations. But before starting at eyeo, I had never worked at a company making the transition from small, intimate start-up, to a grownup, medium-sized business. When I first joined in February of 2016, we were just 40 people. Today, there are 112 of us. That’s nearly 3x growth in less than 2 years.
Now I know first hand just how painful such a transition can be. Recently I’ve been reflecting on my recent experience to unearth lessons worth remembering. Here are some things that stand out.
With 40 people, direct, organic communication is critical. With 100 or more, direct, organic communication is problematic.
The most striking change I’ve noticed over the last two years is how people communicate. In the beginning, everyone knew everyone else and who was working on what. Individuals could operate mostly in seclusion. Every employee had regular check-ins with the CEO or CTO. All of us could easily fit into one big room each week to talk about our projects. If something wasn’t working, it was obvious who needed to get involved. In this environment, communication was mostly between individual people on an as-needed basis.
But as we grew, organic communication began to break down. More people meant more complexity and variety, making it more difficult to know who was responsible for what. And after a certain number, large groups naturally split into smaller sub-groups. These groups naturally introduced even more dependencies and increased complexity. At some point, direct communication became the least effective way of getting shit done.
In response to these issues, we defined departments and project teams, retooled (or created) processes, and even retooled our tools. The entire company was essentially rearchitected in a matter of months, and we’re just now learning whether or not these changes actually make things better (or worse). However, a few things have become clear already.
- Communication works best when it’s intentional, inclusive, and consistent. It doesn’t work so well when people neglect/ignore processes or other stakeholders.
- Good processes facilitate communication and lead to a final result. Bad processes cause communication breakdowns and lead to endless debate, which results in inaction.
- The more people involved, how you communicate matters just as much as (if not more than) what you’re trying to communicate.
We’re still learning how to facilitate collaboration between different people and teams and departments. Change is sometimes very difficult, slow, and/or painful. But coming up with potential solutions, testing them, and applying the learnings is the only sure way to improve.
Culture is something that naturally develops own its own. A culture that attracts and retains talent is something you must cultivate.
A culture initially forms whenever there are 3 or more people, and is mostly self-sustaining up to about 50 people. In a company, the founders and first-hires define their core values as a natural byproduct of working closely together on a lot of different things. Closeness and common cause translate quickly into the “way” things are done.
eyeo is no exception. When it was founded in 2011, the company had one product, no real competition, and a rapidly growing user base. Anyone who worked at the company in the early days had get involved in a lot of different projects outside the scope of their core competencies. They sat together in a cramped office for long hours, made decisions as a group, and relied on their instincts. They were passionate about open source development, user privacy, and technical excellence. Success or failure meant the difference between keeping the lights on for another month, or hunting for a new job. Thus, the culture that emerged was felt intimately by everyone, simply because they did everything together and shared the same, basic values. This culture continued to extend and evolve as more people with more skills were added. Even when I joined as employee number 39, the there was still a distinct, cohesive identity.
But then something started to happen around 60-80 people. More newbies questioning how things work or why they are the way they are invariably put pressure on the incumbent culture. Values that were once self-evident were forgotten or challenged, or else they became major pain points that got in the way of delivering results.
For example, one of the foundational values inherent in the initial eyeo culture was self-determination and a flat hierarchy. When you don’t have enough people to work on all the things well, everybody works on everything until it’s good enough. As long as shit gets done, nobody is going to question your authority, methodology, or decision-making process. So, it’s easy to just “take control” of something. When there are multiple specialists working on multiple projects, however, and those projects are dependent on lot of other people, “ownership” gets real fuzzy real fast. Authority, methodology, and decision-making gets questioned more and more often. Our self-determination and flat hierarchy eventually became a constant hindrance, to the point where things weren’t getting done because nobody knew (or agreed on) who was in charge to begin with. Today, we’re working through these issues and are making progress, but we still have a long way to go.
Another implicit, original value was user privacy. Our primary product was so “privacy-centric” that we didn’t know anything about our users. In fact, we were really proud of this lack of information. After all, there can be no privacy issues if no user data is collected in the first place. Yet this quickly became an issue right around the time I joined the company. As a product manager, how was I supposed to propose new features, improve the core user experience, or measure the effectiveness of any particular solution? How was I going to evolve our products into things that served all users, and not just the “techie” crowd? Now we have 4 product managers, 4 designers, and a bunch of marketing and communications folks. Suddenly, not knowing anything about our users on principle has become a liability. As a result, we’re constantly challenging the idea that “no data is a good thing”, and are working to find ways to collect the data we need to make product decisions in a way the protects our users’ identities.
That core culture is still a part of us today, but we’re trying to find a better balance between idealism and pragmatism. Time will only tell how successful we are. So far I’ve learned that:
- A culture that continues to define itself by accident eventually becomes unhealthy.
- The values that attract new employees are sometimes very different than those that retain existing talent.
- Ideals are implicit only until they’re challenged; whereas values are challenged only when they’re not properly defined.
- In the beginning, the most important duty of the executive team is to hire the right people. Once the company has grown beyond their capacity to manage every single person, then their primary duty is to define and cultivate the right culture.
I suspect that cultivating the ideal culture will continue to be our biggest challenge in the coming years.
As you grow, “us” vs. “them” will mean different things.
With a few dozen or less individuals, everyone at a company thinks of themselves as part of “us” vs. a larger competitor, industry, or system (“them” in the abstract). When everyone knows and works with one another personally, everyone’s ass is on the line. If one person fucks something up, the whole ship can come down. Conversely, when any one person succeeds, that sense of success is shared by all so that it’s always really the entire company that’s winning.
This was true of the company I work for now as well. Whenever our user numbers spiked or we won a legal battle, everyone felt like they directly or indirectly contributed to each success. If there were any internal struggles, they were almost always between individual people. And when we were getting pummeled in the press, it stung the whole organization, not just the guy in charge of public relations.
Then we started to grow from a few dozen individuals to a complex organization comprised of departments, project teams, and management layers. As more people were added, the fewer “originals” there were to share a sense of collective identify with. Instead, people began identifying with smaller groups within the larger group, be it their department or project team. These subgroups started thinking of themselves as “us” vs. other subgroups (“them” in local terms).
Consequently, problems were mostly felt as a struggle between subgroups, and less like existential threats to the whole organization. If something wasn’t working, it was no longer because Competitor A was outsmarting us—it was because Department Y couldn’t get its shit together. Tensions that mounted between individuals quickly metastasized into ongoing skirmishes between departments or teams, eventually becoming a full blown “problem” that was slowing us down.
Through these challenges I’ve discovered that the “us” vs. “them” mentality boils down to several things:
- Just as one cannot un-break a coffee mug, neither can a growing company un-change.
- Any change is stressful, and under stress individuals will invariably gravitate to whatever affirms their core sense of identity, including the people who are most like them.
- Unless a company actively nurtures a shared sense of identity, specific subgroups, such as departments or teams, become a proxy for “others like me”.
- In either success or failure, therefore, individuals within a large organization will feel it locally (within their subgroup), rather than collectively (as a company).
- If left unaddressed, a company can quickly become a victim of localized “us” vs. “them” mentality.
We’ve been tackling this issue by opening up dialogues between groups and executive leadership, holding forums to allow people to discuss topics that are important to them with other from across the company, and becoming more rigorous with our processes. There’s still a lot of work to do, but already I’ve seen the barriers between “us” and “them” start to dissolve. Although tensions remain, we’re slowly learning how to think like one, single organism again (even though a particular department or project team may only represent one, single leg of that organism).
In conclusion: Growth is painful. Steele yourself for the challenge.
There are a million other things that change as a company grows. Almost all of them are impossible to predict or effectively plan for ahead of time. The most important lesson I’ve learned going through this transition myself is that growth can be destructive if it’s not managed well.
Fortunately, the company I work for has been very careful. We came up with a list of roles we desperately needed, but hired no more than necessary. We took our time to find the exact right kind of people, and have always been rigorous in our on boarding practices. We anticipated the need for more structure and processes, and worked hard to propose the right ones to start off with, realizing that anything we instituted might need to be refined, or may not work at all.
The point is that we’re fully aware of how difficult it is to grow in a smart, sustainable way. It’s turning out to be more difficult than we imagined, perhaps, but for as long as we’re willing to test, measure, learn, and adapt, no problem is unsolvable.
Growing an organization may be hard work, but it’s also very satisfying when positive changes take effect. The key is to keep your eyes wide open, and to be fearless when facing new challenges. It’s the only way to stay sane while building for future success.