Startup Secret Sauce: Four Easy Lessons for Longevity, Success, and Scaling Up

Startups are everywhere in Silicon Valley, which makes it an exciting place to be. Where else can you find that heady mix of enthusiasm, great ideas, and the will to win?. For all the highs, though, startups run the risk of some major lows. Quick burnout, lackluster performance, and trouble adapting to a bigger game can turn all the fun into a big disappointment.

Last month, the Harvard Business Review published an article called “Startups that Last” (https://hbr.org/2016/03/start-ups-that-last). It’s well worth the read, but if you’re pressed for time, here are my Cliff’s Notes (pun intended) on four key strategies for startups that want to play a long game.

1.       Pair New-School Fun with Old-School Discipline. In the HBO show Silicon Valley, Richard, a startup founder, seems like he’s always fighting against VCs trying to push a more experienced leadership team onto his precious Pied Piper startup. On the show, it’s hilarious, but in real life, this struggle between startup scrappiness and “grownup” leadership is serious business.

One of the biggest reasons startups fail is they resist building more structure into their company as it grows. Whether it’s formalized job titles (yes, you need them!), job levels, or decision making processes, startups often regard these moves as threats rather than assets. Resist that impulse. Creating more structure is critical when you start swimming in a bigger pond. 

2.      Say Yes to Specialization. As “Startups that Last” points out, startup founders are really good at being Jacks- and Jills-of-all-trades. Their willingness to do the dirty work—to be generalists—is what helps a business pull through those tough first months (or years).

But when the stakes get higher and the business gets bigger and more complex, that’s often the point at which doing everything and anything isn’t going to work. A lot of startup founders resist bringing in the specialized expert for fear that it will make their company a colder place to be, with more silos and less cameraderie—but specialization will not kill your soul. Learning to let go, hiring smart people, and letting them do what they do best will free you up to do what you really love doing.

3.       Bring on the Middle Management. Keeping an organization flat is a big priority for a lot of startups—and by virtue of a startup’s small size, it’s not hard to keep it that way. But expansion often means that a flat organization turns into no organization at all as it gets more chaotic and harder to keep systems working.

It’s counterintuitive, but a measure of management can help to keep autonomy in place—and no, you don’t have to give up the culture of closeness that makes startups a cool place to be. Be willing to build in management as your numbers and complexity increase. At the same time, hold on to those practices (or develop new ones!) that will help to build those friendly, supportive bonds between all levels of employees.

4.        Keep Your People Around. This is probably the biggest secret I know when it comes to helping startups succeed over the long term. When people leave, you lose expertise, experience, and culture. People are the soul of an organization—big or small—and keeping everyone invested in sticking around is really what makes a company capable of greatness.

When I build a compensation plan for a startup, I focus on creating a solid foundation of effective people strategies and rewards programs. How can you stay competitive with hiring and retention? What perks are meaningful for your employees? What’s important to them? If you can keep your people engaged, happy, and dedicated, you’ll position yourself well to be a bigger player in Silicon Valley and beyond.

Clifford Stephan founder and principal consultant for OneCompensation has shaped and implemented compensation strategies for Fortune 100 and other emerging companies in some of the fastest growing industries.