One for the Aging Stars!

Unlike a stable organization, dynamics of a start-up work culture keep changing. Product development strategy, hiring strategy, operational objectives etc are revised as a start-up moves from a single customer to more numbers of customers. Like any other transition, this transition may cause friction between internal teams & employees. The proper internal alignment as well as calibration in work-culture are required as a start-up moves from 3P stage to 4P stage*. Here is one example based on the observation on a growing organization.

We have been working with a small company for past couple of years. Its progress has been spectacular over the years. Recently we have started collaborating on a new project. Our joint customer was very happy with the first presentation by our partner company, however the situation was completely different in the second presentation. The main difference between these two presentation was that the founder of the company was coordinator in the first meeting, whereas the second meeting was coordinated by one senior employee. The senior employee couldn't handle the assignment as effectively as the company founder could have. 

You may see similar examples in your growing start-up. A employee or co-founder who has played very critical role in wining the first customer or making the PoC of the product, may not be playing the same kind of role when the customer base has changed. What should you do with the star performer of your company who is not able to cop-up with the changes? Should you fire the person or wait for him to adapt the new culture? 

The literature on start-up cultures suggests on slow hiring and fast firing. Before you take the ultimate decision of letting go your aging star, try the following tricks.

Communication, Communication, Communication:

A proper communication channel is the holy grail of smooth transition from one stage to another. As you grow, maintain a communication channel with your employees, customers and all other stakeholders. Due to the changing dynamics company policies, focus and objectives may change. It is very important that the internal team is at least aware of these changes. Organizing a monthly all-hands meeting or sending out a monthly status email can be very handy way to set the right expectation all across.

As for the star performer who is not performing up to the mark now, talk to him in person. Try to explain the new role and change in the work culture. Listen to his concerns and then decide the next course of action.

Measurable KPIs:

This otherwise obvious fact remains neglected in case of the hectic life of a start-up. Letting everyone know about your yard-stick is essential for others to meet the performance criteria. In a small scale operation, you and your team may focus on completing the MVP or PoC at any cost. You don't have time to define KPIs for your team members, however when you grow, these KPIs are very much needed to ensure that everyone understands the new process & expectations.  

Investment in People:

The best investment one can make is in the real persons. Your core technology, product features, product development strategy, customer base and business priorities may change from time to time, but most of the time, you will be working with the same set of people. These employees have put faith in your organization and have been given their best since joining. If you see any gap in the performance, try to find out the new tools/courses etc that can give them adequate opportunity to learn and excel in their field. Their excellence is the true measure of the success of your start-up.

Reorganization for new business priorities:

In the early stage, there are no clear work boundaries. Your software developer may be directly interacting with the customer or the sales person may be creating the marketing collateral. Let them freely work & focus on the getting MVP out and acquiring the first few customers. As the company grows, you may also want to shuffle roles of your employees. Understand their strengths, weakness and career aspirations and change the job description if needed.

Exposure to Customer Interaction:

There is no better teacher than a real customer. A hands-on experience is always the best learning tool. Keep exposing your key talents to the customer. Give them the role to understand the change in customer demands, hence the change in company policy. They will be able to appreciate the changes in the company policies, as they will experience the reasons behind the changes. You may not be able to assign every employee of the company to interact with the customers. In this case, monthly all-hands or status emails can have summary of customer interactions.

After trying all these options and giving enough time, if your early employees are not able to cop-up with the changing dynamics of the company, you may consider the last option. Even so, handle it very professionally. 

Notes:
* Please refer my last blog-post on 4P theory of start-up
http://howstartupworks.blogspot.in/2015/02/4p-theory-of-start-up.html

4P Theory of a Start-up

The four major parameters of a start-up equation are founder(s), employees, customers & product(s). The other components of the ecosystems are partners, vendors, investors and VCs. Seed capital & funding amount also play critical role in the start-up dynamics. However it is all about people (founders), people (employees), people (customers) and the product when it comes to measuring the potentials of an organization.

Based on these parameters, a start-up can be classified into one of these three stages:

• 2P Stage: It is the early stage of an start-up. The product is still in the idea form & the only set of people associated with it is the founding team.
• 3P Stage: Some employees have joined on-board and are slogging towards making the first prototype of the product.
• 4P Stage: The prototype of the product or MVP (Minimal Viable Product) has been exposed to customers. There is some customer base using and evaluating the product.

After successfully surviving the 4P stage, a start-up gets success in terms of bigger customer base, higher revenues and/or adequate funding.

Lets compare these stages based on the following criteria.

Criteria	2P Stage	3P Stage	4P Stage
Entry Criteria	Commitment to start. It can be started without a clear product idea. Commitment is the only key here.	1. Clarity on idea 2. At least one employee	1. Pilot of the product 2. At least one anchor customer
Objective(s)	1. Fine tuning the idea 2. Evaluate potential of the idea 3. Finding Co-founder(s)	1. Pilot of the product 2. Getting first few guys on board 3. Finding anchor customer for the product	1. Capture feedback from the customer(s) 2. Refine product features 3. Bring order in product development
Operational Focus	Survive while networking	Sell while building	Build while selling
Product Development Strategy	PoC by any mean. Big bang model	Small scale/duration pilots. Rapid Prototyping.	Improvise based on customer feedback. Agile development.
Priority list for spending money	1. Networking 2. Setting-up a bare-minimum platform for developing PoC	1. Setting-up an office for some number of employees 2. Hiring extreme end-roles, i.e. either a hands-on CTO to lead/create the design or a fresher if you are taking care of design	1. Fine tuning the product to the customer's need 2. Hiring some mid-level roles
Priority list for NOT spending money	1. Buying/renting out office space/accessories 2. Hiring specific roles like developers, HR, designers	1. Hiring mid-level roles 2. Establishing hierarchy 3. Buying/renting out fancy office accessories (Yes, printer can be considered a fancy office accessory, if you can work without it)	1. Getting expensive talent on board
Exit Criteria	1. Clarity in idea 2. PoC being accepted	1. One or series of pilots 2. Strong core team identified & retained	1. One or series of products 2. Customer base