Why do you want to grow so fast?There are many good reasons for a company to grow, but there are probably more bad reasons.
Yesterday I explained why growing a startup from 10 to 50 employees requires hiring a lot more than 40 new people.
What I didn’t do is ask why you want to go from 10 to 50 employees in the first place.
Now, maybe you don’t. Maybe you only want to go from 10 to 30. Or 20. Or 15.
Whatever your growth goals for 2023, you would do well to consider a few things. Most directly Why do you want your company to grow?
Of course there are many good reasons for a company to grow. But there are probably more bad reasons to grow. Especially in an early-stage start-up. Here are a few I see all too often.
We need to go faster!
The truth is that with very rare exception, hiring new people slows us down. This has been well documented literally for decades (see The Mythical Man-Month, first published in 1975).
Of course, there is a time to hire to improve future capacity. But that time is well before you need the capacity. And if you need the capacity now, “better late than never” won’t cut it. You probably need to find more efficient ways of working, not hiring more people.
More headcount attracts investors
I’m not a venture capitalist, so I can’t speak personally to their motivations. But consider this: If growing too fast hurts your business, but it attracts investors… are these the kinds of investors you actually want to be attracting? Do you want people with such a self-destructive business sense on your board of directors, and influencing business decisions?
More direct reports makes me feel important
While anecdotal evidence suggests this reason is rampant, few people would likely admit to it. But consider. In your heart of hearts, does this play a role? You don’t have to tell me, or anyone else. Just consider it as an internal matter.
If this does play a role in your decision to hire more or faster, how can you counter this urge, and balance it out with solid business advice?
Startups grow. Right? It’s part of the package.
Not so fast. Instagram had 13 employees when it was acquired for US $1 billion.
Also. If your goal is to build a unicorn, why are you trying to do “what’s expected”?