Five Things to Tell Your First Time Startup Employees

January 25, 2011 1:49 am

The differences between larger companies and smaller ones are many and varied. In a large company, the fundamental truths are well known. The established company knows things like who the customers are, how much they will pay for the product, what they like about the product, etc. In a start up company, not so much. Discovery is key. Communication is vital. In a start up company, the potential customers and price are unanswered questions. And not only are things unknown, there is usually a limited time to determine the answers. All this mystery can be quite confusing to employees new to the start up environment. These formerly large company employees can enter a small business ill-prepared to succeed even though they’re fully capable of doing so. To change that, here are 5 things you should tell them.

Pursue the truth
Tell your new employees to engage with people who know or should know the answers to the questions above. Ask questions, don’t be defensive, accept input, encourage open ended conversations, don’t preempt responses. Discover as much as possible about customers; their perceptions, and their thoughts. Always attempt to uncover knowledge and the truth. Make this is a voyage of discovery. Sid Banarjee, CEO of Reston-based Clarabridge, offers that, “When your company is still in a discovery mode to determine what it might be when it grows up–‘your agenda should be to have no agenda’. Create an environment where everyone in the company sees the raw data from customers, product needs, and market wins and losses, so that everyone can develop a perspective.”

Communicate whatever you discover widely
Assure your employees that if they believe it to be well sourced, they should communicate whatever is discovered as broadly as possible. For the time being, limit analysis and conclusions. Find facts and share facts. Let the group form the big picture from everybody’s facts.

Matt Fellowes, CEO of DC’s HelloWallet, notes, “Everyday we’re discovering new insights that will drive our success, which is exciting, but also a daunting communication challenge. Make sure you write everything down and store lessons in a place that is easily accessible for the whole team.”

Be effective, not efficient
Large companies wake up every morning and aim to drive cost out of known working processes through improved efficiency. Small companies should get up every day to create working processes, especially ones that find, sell or service customers. If small companies aren’t effective, they don’t ever get to try to be efficient. Doing it more efficiently comes after, and only after, one has a command of what is going to be most effective.

This is a race against time
Tell your employees, “we are in a hurry here,” that the small company and they personally need to move quickly. Smaller size should enable nimble response and agility. Tell your new recruits that if things aren’t happening fast enough, they should let you and everyone else know it. David Steinberg, CEO of Georgetown’s SnappCloud, offers, “Most big companies are hamstrung by their own overhead– which makes them slow. Big companies tend to turn protective of their existing strategies and discourage change. Start ups can gain advantage here.”

There is no them it is just us
The inherent size of large companies and human nature usually gives rise to a “tribal mentality.” This mentality conveys that one’s first loyalty is to their department (accounting, sales, marketing) or “departmental tribes,” causing many to believe that it is natural for different departments within the same company to be pitted against each other. And from this, these employees can bring a worldview that departments are tribal or should be—pitted against one another is the natural state from their point of view. This tribal bias is unavoidable in many large companies. It is ridiculous for a small company. These first time employees need to understand that the tribe is the company, not its departments. There is no “them” in a small company. And, accordingly, there is no one to blame for our failures. It is only us, they must understand, and we-collectively-will succeed or fail.

The difference between the smaller company and the larger one isn’t just less bureaucracy. There is freedom and urgency. It can be invigorating for anyone up to the adventure. In fact, Steinberg says, “In a start up your ability to take an idea and turn it into a result is not only possible–it is encouraged. While the work may be harder, the rewards for everyone at a successful start up are much greater.”

Post By Don Rainey (1 Posts)

Don RaineyDon Rainey is a Virginia based venture capitalist, with a long and active relationsip with the academic arena as a professor and student mentor. He has particular experience and interest assisting with technology transfer from public and academic institutions to the commercial sector. Don’s area of investing expertise is based in Internet related technology start ups, and in the booming area of social media. Don frequently contributes guest columns and appears regularly on.

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