Authored by Sharel Omer, CEO of Affogata
With start-ups raking in a record $125 billion in the first quarter of 2021, many are hailing a new era of success for innovators. But as they acquire capital, scrappy start-ups often start feeling the pressure to pivot to a more corporate model, both in terms of company culture and business processes. This shift to a corporate vibe can cause companies to lose some of that benevolently chaotic start-up energy which leads to innovation and breakthroughs.
In his resignation letter, former Waze CEO Noam Bardin said the transition to a corporate environment stymied the creative juices that freely flow through a start-up. After being acquired by an industry titan, his team’s ability to “retain the start-up magic [was] extremely difficult,” Bardin wrote. “I was just worn down by the nature of the beast.”
As start-up leaders grapple with internal reckonings around heightened expectations, it’s critical for organizations to remain true to their roots or risk losing what made them special in the first place. Here’s how start-ups can maintain their edge.
Keep senior management approachable
Apple CEO Tim Cook enjoys a 92% approval rate from employees, with one front end engineer describing how accessibility to senior management impacts company morale. “You feel like everything you do has a direct impact and you're a stakeholder,” the engineer wrote. “The VPs and CEO are not removed...It's common to see them eating lunch on campus amongst everyone else.”
It’s no accident that Apple, which is ranked as the most valuable brand in the world, still values an environment where employees can organically interact with senior executives. It’s because casual access to upper management encourages open communication, and means good ideas can quickly reach company leaders.
An innovative spark or critical breakthrough should never need to be run up the flagpole before being presented to someone who can make it a reality. This non-hierarchical, fluid structure is part of the secret sauce that keeps companies agile and dynamic.
Beyond building company loyalty and generally boosting morale, having senior management interact with staff keeps leaders abreast of industry trends and the day-to-day realities of the business.
Start-ups have always paid close attention to the word on the street, and companies that don’t listen to the conversation online are losing out on a huge opportunity. From the Robinhood saga to Harry Potter game boycotts, it’s clear that the power of online communities is stronger than ever. The public square has gone online, and users can flex their collective muscles in ways that send shockwaves through entire industries.
Knowing what features customers are praising (or, conversely, bemoaning amongst peers) means that companies can react when it matters. AI-driven social listening, which identifies unusual patterns, can help cut through the chatter so businesses can streamline real-time responses and even preemptive action. It allows different departments to work together on high-level strategic initiatives that are perfectly in tune with customer needs.
Enabling cross-company collaboration creates holistic, big-picture responses that go far beyond offering a disgruntled customer a coupon. Empowering teams ranging from customer success to R&D with critical insights based on customer feedback enables companies to make data-driven decisions that have a huge impact on overall success and the bottom line.
By keeping an ear to the beating heart of their customers and the market, companies that are transitioning from start-ups to larger enterprises can keep the super responsive edge that puts them a step ahead of their competitors.
Cut the red tape
Martin Lindstrom, a prominent management consultant, believes that excessive internal rules and regulations around business practices in a company are the source of inertia and frustration. According to Lindstrom, successful companies have only three or four reporting levels. Each reporting layer adds 10% to an employee’s workload, he says.
To maintain that speedy start-up edge, it’s crucial that all procedures and bureaucratic elements be kept to an absolute minimum. Day-to-day policies regarding procedures from reporting to software and hardware purchases are the building blocks of any business, and must be as free of red tape as possible.
During the transition from start-up to corporation, on-the-fly verbal approvals for decisions may no longer suffice. Staff often have to run a gauntlet before moving forward, including approvals from IT, BI, legal, and so on. But whether it’s an IT staffer who has found a solution that can streamline business processes or an HR recruiter that’s come across a promising candidate, keeping roadblocks to a minimum is key.
While it may not be glamorous, company leaders must commit to developing and executing policies for business procedures that put the fewest obstacles between staff and decisions that can potentially make things better for the business.
Though many companies struggle to balance the obligations implicit in serious funding with the “go-fast-and-break-things” spirit of a fledgling venture, it is possible for businesses to reap the benefits of serious investment, while keeping their street-smart and super responsive start-up edge. Businesses that stay true to their roots and keep a close eye on customer chatter can maintain their start-up level of dynamic response.
By prioritizing the start-up magic of ultra-fast customer responsiveness, flexibility, and easy communication between staff and senior management, companies can enjoy the best of both worlds. Pairing funding that’s critical for growth, alongside the imaginative, can-do spirit of a start-up, puts businesses in a position to thrive.