What one founder (and Founder Friday speaker) learned when she scaled her business from eight people to 18 after a Series A round.
By Alison Johnston (CEO & Co-founder, InstaEDU)
Through most of the time between InstaEDU’s seed round and our Series A, we had the same core team of eight people. We were lucky to hire some incredibly smart people early on without many recruiting headaches and with little management overhead.
When we raised our Series A in July, one of our primary goals was to grow our team to better execute on what we’d learned during the previous year — to help us build out the next set of amazing features and bring in the next cohort of passionate users.
Over the past five months, we’ve gone from eight team members to 18. It’s been incredibly valuable (from a business perspective) and rewarding (from a personal perspective), but it’s also been one of our most interesting challenges. Despite maintaining the same caliber of talented, self-sufficient people, the overhead and thought required for hiring and managing our team has increased exponentially.
This problem is not unique to us; I’ve heard it from almost every CEO I’ve talked to who has moved from seed to A, so I wanted to share some of the challenges we’ve faced and how we’ve worked to solve them.
Hiring Great People Takes a Lot More Time (and Money)
Our recruiting costs before our Series A were exactly $0. We were able to leverage our personal networks and free online resources (specifically AngelList and Hacker News) to find great people without a significant time or financial burden.
As we ramped up our efforts, though, recruiting suddenly became a significant portion of both my and our CTO’s time. Instead of having more bandwidth as a team, we had less. It quickly became apparent that we needed a better solution.
After talking to several CEOs, our board members, and recruiters that we knew, we realized that we needed to really invest in team-building and make it a priority. For us, this meant engaging with contingency recruiters, paying to use platforms like Entelo, and most importantly, hiring someone in-house to lead our recruiting and team development efforts.
Bringing on someone to manage this was the best thing we could have done. It allowed us to get a lot smarter and more strategic about our recruiting and freed up a lot of time for myself and both of my co-founders. There’s no silver bullet in recruiting; as you get bigger, you just need to accept it as a core part of your business strategy.
Not Everyone Is Exposed to Every Part of the Business
When your feature set is small, your usage is relatively low and everyone is sitting in the same room for ten hours a day, it’s easy for everyone to be on the same page in terms of how things are going and where you’re heading as a business.
Flash forward to today: we’re in a larger office, with the team split up in two different rooms, and new people starting frequently. As a result, we’ve had to become very intentional about keeping everyone involved in both the day-to-day happenings and the long-term vision of the business, in a way that was unintentional six months ago.
For the day-to-day happenings, we do a daily five-minute cross-team standup, weekly team-wide email update from the marketing and support teams, and summaries after every product release. We also publish a summary of a key success metrics, so it’s easy to see how we’re doing every day.
For the longer-term vision, we give the most recent investor pitch to each new employee, go through the board deck after every board meeting, and do weekly team brainstorming lunches to get everyone’s ideas on working through challenges.
These are by no means comprehensive lists, or even right for every team, but they’ve worked well for us at InstaEDU.
Founders Become Worse Managers
Having a flat organization is something that a lot of startups value, InstaEDU included. Ideally, everyone is working together as a team and not spending their time jumping through management hoops or running through sets of approvals.
As a result, everyone at InstaEDU reported to Dan, Joey or I (the three founders) until about a month ago. For a long time, it seemed like the easiest way to reduce overhead and help people work as effectively as possible. But as you grow, founders simultaneously have more people to enable and more things that require their attention. This just doesn’t scale.
We decided to promote a couple early employees to management roles, and by doing that, we were able to better distribute responsibilities, help make sure new employees got the right level of attention, and still maintain a relatively flat feel. (Management and training roles can also be informal, but the key is making sure that every team member is getting the right amount of attention to be productive.)
At the same time, I became more deliberate about connecting with people. I now have weekly one-on-ones with the people I work most closely with and monthly one-on-ones with any team member who wants them. (This is a chance to ask questions, talk about where the business is going, etc.) Scheduling regular meetings can feel corporate, but I’ve found that having that scheduled time is super helpful when things get hectic.
There Are More Differences Between Team Members and Fewer Overlaps
In a small team, it’s relatively effortless to make it feel tight-knit. This gets back to the whole ten hours a day in the same room thing.
At 18 people, we’re still a loooong way from being a large company, but there’s already significantly less natural overlap between team members. I’m a very strong believer in the need for casual collaboration, and this comes from team members doing non-work things together. As our team got more diverse and roles became more focused, it quickly became clear that this was something that we would need to invest in.
The first key for us was having someone who owned the execution portion of team building. In our case, this is the same person who we hired to do recruiting. We then very deliberately decided on what team events we would do and how often we would do them. This helped ensure that we actually make the time.
At InstaEDU, we do team happy hour every Friday and two other evening events each month, but it doesn’t have to be that formal. The change that I think made the biggest difference for us was buying lunch tables. Giving everyone a chance to take a break and chat in the middle of the day (instead of browsing Facebook while eating at their desks) has made a big impact on company feel.
At the end of the day, your team is your business, so it’s worth investing considerable thought and time into making it as productive and effective as possible.
I’ve learned a lot in the last five months, but still have a lot more to learn. I’d love to hear how others have helped optimize for a growing team and company!
What challenges have you faced scaling your team?
About the guest blogger: Alison Johnston is co-founder and CEO of InstaEDU, an online marketplace where students can connect with great tutors on-demand. Prior to InstaEDU, she was an early team member at Aardvark, Box and Nextdoor and on the Google+ marketing team. Follow her on Twitter at @ajalison.