Here’s How You Can Prevent Your Start-Up From Falling Apart at 50 Employees

Its common knowledge amongst the public that Start-Ups aren’t a sure shot. They go through this teenager startup phase where the company starts to go berserk once their employee count hits the number 50.

It happens. The original employees lose their patience faster as they have to show new people how to do simple jobs and train them again and again. Their tolerance for mistakes which were previously made by them in the beginning reduces.  As a result, the succeeding tier of employees starts to form protective groups amongst themselves, placing fleeting importance on titles and statuses. Power plays are soon made as the company grows, as teenagers, the late twenties and thirties start to introduce chaos. Therefore the company falls apart before it exceeds 50 employees.

Of course, the above scenario is a bit dramatic but not unheard of. That is why we need to talk about what to do to prevent startups from failing before soaring into the wild.

At 50 employees, there are a few positive aspects. The company is growing and if it’s organic, that’s even better. Internal culture is being built as more face-to-face communication is documented with meetings and memos on demand. Everyone in the office is likely on the same page which means that not a lot of time is wasted. The founders and executives of the company are occupied with working on the product, strategizing towards the market and keeping the customers happy. The structure of the company is the last thing on their mind which attributes to the chaos that’s bubbling.

All parents are aware that teenage years are awkward and there’s really no cure to it. You just have to wait it out or take measures to survive it. Startups are exactly like that.

Although ‘doing nothing’ may be a valid option, does it really make sense when the company starts losing people?  The ‘do nothing’ over here means pre-emptively doing nothing and then dealing with issues as they arise one by one. 

Certain guidelines have to be established in order to set rules for people to follow. Designations like seniors have to be handed out with careful consideration. Calling for a meeting should only be allowed if it fits the necessary criteria otherwise everyone’s calendars will be filled and nothing will get done. Working remotely or working with a team has to be considered carefully, keeping the team’s productivity in mind.

It’s better to be proactive about the structure, freeing the mind from the fear of becoming too corporate or stale. It works if the organization is centralized and transparent. A single string of guidelines about the rules, procedures and FAQ’s that holds up the company’s philosophy will make it easier to herd the sheep so to speak.

Another measure which is the opposite of the ‘Do Nothing’ is to hire a lot of middle managers. The experienced managers who can lead a team must first integrate themselves into the company’s operations before being effective. Bringing their older job’s schematics with them won’t work because it won’t fit.

Promoting your own employees to be middle managers might be ineffective as they’d feel burdened by a job that’s not technically theirs. It might lead to lesser productivity. On the other hand, creating owners and team leads might do the trick. Things and processes need more management than people do. Therefore, giving the employees the responsibility of their own processes will increase productivity and decrease the chaos.

We’ve all taken advice and adopted other company policies for the greater good of the company. Borrowing bits and pieces of methodologies from successful organizations aren’t unheard of. But what worked for them, might not work for you. Trendy solutions are usually temporary. Just because some or all companies are adopting a policy, it doesn’t mean it’s a great fit for all. Instead, you could divide and experiment. You could take pieces of policies from different companies and run small trials to see if they’ll work in your environment.

Often, once a company hits a certain number of employees, they stop hiring and outsource everything. This could include some clean breaks, like contracting all of the development, all of the human resources, or all of the support. This means that you could run a tight ship without having the headache of dealing with a rocky work environment. But there is a huge risk of all that knowledge and experience about the company being out of the house.  Instead, hire contractors and part-timers with the intention of hiring them for full-time positions if there are enough money and resources for it. As the company grows, the teams will get absorbed into running like independent units in a single organization.

In conclusion, if we want a cure for the chaos of 50 employees, a company needs to be built exceptionally from day one until the startup becomes a fully functioning adult, ready to join the world.