You Can’t Scale Without a Team

While founders create startups, you can't scale without people.

On October 12, during Edmonton Startup Week, Arden Tse (Yaletown Partners) and I gave a sold-out talk to founders and tech leaders on the topic of scaling teams. The idea had emerged months before over coffee (as most ideas do). We talked about how our tech ecosystem places a lot of emphasis on founders - which is so important in the early days but ultimately doesn’t lend itself to scale. We wanted to shift the conversation.

We decided to focus on that critical point in time where the company becomes less about the founder(s), and more about the team that gets you to that next stage of growth. We tackled the presentation podcast-style. Arden (with his investor hat) and I (with my executive recruiter hat), shared what we’ve seen work and - maybe more importantly - not work when it comes to scaling tech companies. It was fun, it was casual (very much my speed), and based on the amount of incredible audience questions we received at the end, it’s a topic that deserves more attention.

As executive recruiters in the tech ecosystem, we often partner with founders who are at an exciting inflection point in the growth of their company. They’re scaling - and with that comes a critical juncture - it’s time to hand off some of their hats.

In our experience, the companies that have successfully scaled are led by founders who have handed off most of their hats. They are the best at knowing:

• who to trust
• how to inspire them
• when to give them direction, and
• when to get out of their way

This is the opposite of what made you successful as a scrappy team getting an idea off the ground. Founding teams almost always start out wearing every hat. Some of those will be easy to take off (I’d argue most founders will gladly hand over bookkeeping or admin), but many struggle to remove the hats they think they need to keep wearing, even if they aren’t good at it.

It comes down to self-awareness and a scaling mindset - learning to step up and step back. We get it - this is easier said than done.

Hypothetically, let’s say you have self-awareness in the bag. You know you should hand things off. Where do you start? How do you know what you need, let alone how to design the role? Let’s chat through that…

Case Study, People Leadership:

• You’re a CEO with a deep product background.
• You excel at product vision and you’re excellent with customers.
• You struggle with people leadership. You know it’s critical, but you don’t have the skills to own the organizational design or to align a large group of people to effectively execute your vision. You know this isn’t a character flaw or some sort of defect you have as a leader. Instead, you realize you can hire and lead someone with those strengths (a COO and/or a Head of People & Culture).
• You do - and while you are freed up to focus on what you’re great at, your business finally grows and prospers.

If step one is gaining the self-awareness to know what you’re great at and what hats to give away, then step two is: get clear on where you’re going.

Picture your business in 12-18 months. What have you achieved? What milestones have you hit? When the destination is clear, it becomes easier to reverse engineer and build the right leadership team that is complementary to your strengths.

Case Study, Sales Leadership:

You’re a Canadian, pre-Series A climate-tech scale-up. You’re getting more customer traction in Europe than in Canada and the US combined. In 18 months you want to say: “I’ve doubled revenue, established product market fit, validated the European market opportunity and opened a European entity.”

If these are your goals, all signs point to sales. But what does the profile look like?

• You know you need someone on the ground in Europe.
• You have ambitious revenue targets, so you know that first and foremost, what you need is a deal-closer.
• This person will be on their own in Europe (at least to start), so they need to be both a hunter and a farmer.
• They’ll also need credibility with ideal customers in your industry, who are known to be more conservative and cautious in trusting new players.
• You land on a “Head of Sales” profile.

Why?

• The ‘Head of’ title acknowledges that this leader currently owns the function (which they will, as the first salesperson in Europe).
• It should give them the credibility they’ll need to get important meetings.
• At the same time, the ambiguity of the ‘Head of’ title allows for flexibility. Their role could evolve into a Director or VP as the company grows.

Let’s recap:

• You know which hats to keep wearing and which ones to hand off.
• You have a destination. You know what you need and/or want to be achieved in 12-18 months.
• You’ve reverse-engineered a role with a high-level sense of what this leader’s scope of ownership will look like.

Now what?

De-risk, de-risk, de-risk.

De-risking key hires is always important - hiring the wrong person or prioritizing the wrong role always comes at a cost - and it’s especially important as you scale in the early days. We have many examples of the CEO who hired their friend, the tactical marketer, into a CMO title. This tends to work for a while, until your investors see that this isn’t a ‘real CMO,’ and you need to layer them with someone more senior. It’s possible, but it’s tricky.

The key to avoiding this scenario?

1. Think about what this person will do and own
2. Have a sense of how this might evolve as the team grows

Here are a few ways we help our clients de-risk:

Avoiding the pedigree trap

While big brand names can make for an impressive CV, be aware: big brand experience can be the opposite of what a scale-up needs. Why?

• The larger and more established the organization, the more narrow the parameters around their role. Specialists likely aren’t what you need right now.
• They’re used to having lots of resources, a big brand name behind them, and systems and tools to do their job well. These are likely things that are not abundant at your scaling, yet still resource-constrained scaleup.
• The challenges and opportunities are very, very different.

Simply put: The sales leader from Microsoft may not be the best choice when you’re selling a product that doesn’t have brand recognition, where they won’t have a heavy marketing budget and a hoard of sales support. Finding someone instead who has built an unknown entity from the ground up will likely have more learnings to apply in the earlier days.

Relevant stage experience

Has this person seen where you’re going? “Relevant Stage Experience” is often a top core requirement in any search we do. A CFO who’s lived and breathed the journey from Seed to Series A may not have seen every possible obstacle or scenario that your company may face on your journey from Seed to Series A, but you can more safely bet that they’ll know how to handle those challenges as they come up.

Disclaimer: Hiring a leader with relevant stage experience has also been known to improve Founders’ sleep. *sleep data pending*

Every day our team works alongside founders and leaders navigating how to scale their teams. We hope this gives you a starting point to think about scaling your own team! And hey - if you need help, you know where to find us…