Founder Confession: When Does a Startup Become a Grown Up?

Piotr Zaniewicz in

Blog/Founder Confession: When Does a Startup Become a Grown Up?

It was February 2016. I remember the day we moved out from the old office. It was small and located in a townhouse apartment. Space intended for 20 people was occupied by nearly 40. Sales reps were cold calling customers from a designated spot right next to the microwave, and team meetings were held in the hallway. It has occasionally happened that due to space shortages, job interviews were conducted in the staircase.

After over three years of being in business, I could see how far we’ve come. The question then dawned on me: Are we still a startup? What separates grown companies from beginner businesses?

Let’s start from square one

Before I decided to invest all my resources into growing RightHello, I got a job offer. Certain Polish company wanted me to join them as they move to Silicon Valley. Despite this was pretty much the perfect opportunity for me, after some deep consideration, I declined it.

I knew back then that sales automation and cold emailing hold incredible potential, and that this is what I want to get involved in in the long term. I was already familiar with the channel from my previous work and had the chance to learn first-hand how efficient cold emailing is.

I started talking to some thirty startup founders and they all agreed with me. The biggest pain for businesses is establishing first contact with their target customers. This has only made me more confident that my business idea may actually turn out to be a success. Interestingly, I only formally set up the firm when I had my first five clients confirmed. These were some of the founders I’ve been talking to about RightHello.

Build your business a solid foundation

The first couple of months of trying to get the startup off the ground were quite hectic. I hired two people, “the office” was my favorite coffee shop, where we used to spend hours.

A breakthrough came when one of the clients shared our Facebook page. Leads started to come down, so I decided to hire more people in order to scale up our operations. Then the first investor came. There was not enough tech, lots of grind, and quite a few small fires to put out. As it’s usually the case with startups, we were forced to constantly improve on the process.

I was laying the business foundations – I had to act on the microscale and tell everyone what to do. Luckily, with time, some experienced people joined the team, who were capable of taking over some of my duties. The more people started to work at RightHello, the more the company evolved – its structure, work ethics, and most of all communication.

A major challenge was to adjust the management and internal communication styles to the conditions we faced as a business. I learned back then that a startup soaks up all the good and bad habits of its founder. I came to understand what I should change about myself and the company. I realized that my every neglect will affect the company’s revenue.

Established business vs. garage enterprise

Going back to the groundbreaking moment I mentioned… After moving on in 2016, everything was very orderly at the new office and every team member knew his role. Now, when I walk through the office, I see nearly 70 people working. We become more confident about what and why we do with every passing month.

Was it then, that I realized we’ve actually become an established business? Was it then, that my company was no longer a startup?

Not at all.

Switching offices and my understanding of RightHello’s maturity wasn’t at all related to developing a business model, but rather to a feeling we’re no longer a garage enterprise. This helped me notice that what we’re doing makes a lot of sense and certified the heck of a job we’ve done thus far.

How can one define a startup?

When I googled “startup definition”, the first result showed a popular description I’ve seen before. These are the words of Steve Blank, one of the most well-known Silicon Valley entrepreneurs. According to him, a startup is “an interim organization, looking for a profitable, scalable, and repeatable business model”.

On the other hand, I read in a Forbes interview a definition that described a startup as a company solving a problem, while the exact manner of doing that isn’t obvious and doesn’t guarantee success.

Before I elaborate on how I see the moment a company leaves the startup stage, I want to discuss things which, despite what’s commonly believed, don’t turn a startup into a grown business.

Small business ≠ startup

As far as you’re allowed to experiment in a startup, and it’s a key concept to solving all your current challenges, (“let’s try THIS, test it, and see how it works!”), a fully-fledged business has a proven and clear-cut money-making mechanism.

A lot depends, of course, on the niche you’re in, but that’s a topic for another article (read more about online and offline business).

What’s the difference between a startup and a small business?

At a young (not necessarily small) company you keep changing things because you’re looking for a way to create stable and steady revenue. At the same time, you have to accept there are going to be losses and survive multiple failures.

Why wouldn’t you use proven solutions and set up the company based on a developed business model? Well, because that’s exactly how most businesses operate, which makes competition stiff. In order to come up on top, you have to be innovative. For me, innovation is a synonym of the word startup.

Investors ≠ validation

Some will say that the breakthrough moment for their startups came when they won investors. In RightHello’s history, we’ve managed to win financing from investors on three occasions, however… despite what people may think, it’s not the investment that makes a company stop being a startup.

Investors do affect the company’s potential, they facilitate business growth. Still, they only buy the vision of where the company may be in 3-4 years. Where it actually will be depends only on you.

Extreme focus and tunnel vision

This is related to serious, oftentimes very difficult business decisions, and it’s the very fact of taking them which in my view makes a company stop being a young startup. BUSINESS MATURITY is what I have in mind, defines the way you see your company.

#1

The moment you realize that business growth is no longer something visionary and theoretical, but something very corporeal. From the psychological standpoint, for me, this moment was moving into the new office. In practice, business maturity came along with the first tough decision – it was when I had to decide to terminate the first employment contract.

#2

The moment the corporate culture and communication style change. In my case, this shift was related to the number of people I was employing. The first milestone comes when you hire 20 people, the next when it’s 50, another one when you approach 100. Each of these milestones is a major switch.

The style of communication at the office differs when there are 20 people working and everybody is able to talk to each other freely, from when there are nearly a hundred employees taking up the floor and most of the communication takes place via email. I had to relearn business management before each of these stages.

#3

I often talk to people managing billion-dollar companies. These conversations are an enormous source of knowledge for me, which helps a lot in my daily work. All these experienced people keep talking about one thing – the moment of huge focus and tunnel vision which makes you realize that this is what you’ve strived for – you’ve arrived at the place you wanted to be in.

Focus makes you realize you’re no longer wandering. You have certain amount of experience and understand that your company should be exactly where it’s at and operate the way it does. You know already what’s crucial for its success in every aspect.

Can’t sleep, making sure my startup holds

What’s great about startups is the fact they’re built by young, energetic and enthusiastic people. They pour their hearts in and are very engaged. All the experienced managers, supervisors, and directors – they are the ones solving business issues on the daily, giving me a bit of a peace of mind.

Small fires are being put out by the management, and I can focus on what’s really important for the company – its future and growth. Entering this stage is yet another confirmation of your business maturity and the fact you might not be a startup anymore.

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Piotr Zaniewicz

Founder and CEO at RightHello. Believes that the most important validation of business ideas is to find paying clients. That’s when you know you’re going in the right direction.

  • Very interesting. Startups and Entrepreneurs that begin thinking of themselves as ‘small businesses’ will grow up faster and better. After-all, even startups are ‘small businesses’ that need to focus on basics of business
    Raj,
    Editor mydigitalstartup.net

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  • It only grow up when your startup earn enough to budget itself.