Four Reasons Behind the Startup Mentality
- Membership: Every employee in a startup is a member of an elite team that is focused on one goal—to make the company grow and become profitable. That’s done with stock options. They give everyone, sometimes including the janitor, a piece of the action. You’re not working for the VCs (although they will profit enormously) or even for senior management (although they will also do very well), you’re working for your own best interests. If the company succeeds, you will benefit.
While exit strategies vary, the company has to amass value before anyone can think of cashing out. The golden carrot, not management edicts, drives employees to work long and hard.
- Flat structure: In a company of 10 to 70 people, there’s no room for layers of management. The @WSJ article quotes a professor at Dartmouth’s Tuck School of Business, who says, “The rule-breaking mindset of many entrepreneurs doesn’t fly when ideas need buy-in from senior executives and several levels of management.” Ya think?
Running an idea up the food chain for approval takes time. At every level, managers feel the need to add or change or criticize, or run a test, or get more data because they think that’s their job. And if your idea or innovation challenges his pet project, her plans for getting promoted, or the status of their entrenched product line, forget about it.
Senior management doesn’t much like “rule-breaking mindsets” either. They created those rules, remember, and breaking them is a form of unspoken criticism.
- Trust: This goes hand-in-hand with membership. If you are a member of a small and nimble team, you are trusted to do your job. You are trusted to make decisions based on information you have gathered and analyzed. You are trusted to ask questions, offer suggestions, and challenge stale thinking. You are trusted to meet with vendors, to write plans, and to read and sign contracts.
I remember working at Chipcom when it was still private and planning to go public. Our CEO, the late Rob Held, called a company meeting and stood in front of his team of Chippers to tell us what was happening. He said that he was going to be transparent about the process and tell us—the Chipcom team—everything. At the same time, he reminded us that what he would tell us was confidential information and he trusted us to keep it that way. After a vote of trust like that, who would even think to say anything? He kept his part of the bargain and we kept ours.
- Teamwork: In big companies, you do your job, keep your nose clean and your head down and hope that senior management is making the right decisions. In small companies, everyone jumps in to help out. If someone else in your department—or even another department—needs help, you pitch in. You ask questions like, “How can I help you get that done? What can I do to make sure you hit your deadline?
And you do that despite having an enormous workload of your own. You do it because you’re all on one big team and that team won’t succeed if you allow someone to fail.