The Early Employee Scaling Trap

By Eric Anderson

Yesterday I listened to reflections from founders post-acquisition. They offered ten simple lessons learned, one that has stayed with me. People are the hardest part of your startup to change. In an era of fast iteration, pivots, and dynamic growth, tech ventures are much more flexible than their principle resource. How do you hire for scaling? More importantly What does that mean for young early employees like MBAs?

Serving new markets often require highly integrated products. For Apple to successfully bring the iPod to market, they had to create, along with the device, the software to be used on both PCs and Macs as well as contracts with the music industry. Without any market precedent for digital music sales, they had to create an end to end solution. This was eventually modularized as later companies specified how different parts of the market would interact. Now different hardware, software, and content vendors can bring separate products to market knowing they can work together.

Similarly, young companies may need to be integrated. Integration, as used here, will mean a company full of slightly overlapping generalists. This allows the company flexibility in what they do. The decision to create a native app or web app could be constrained by what your small technical team is familiar with. A transition from ad-based revenue to sales will require a different skill set. In order for your company to be nimble, your team must be broad rather than deep. That bread comes from a small group and probably at the cost of depth.

Alternatively, scaling companies need modularity. Once product market fit is found, money pours in, and the gas pedal is dropped, the hiring game changes. Knowing what to produce, means you have a pretty good idea of what you need to produce it. More functional experience and specialty can be hired and the interface through which these functions interact, can be specified. You may end up with a team much larger but with less breadth, as you know the talent you need.

Shifts in resources are common to young companies, but this shift in talent may be tricky. Employees five through ten are likely young generalists. Young both because their lives can stomach the risk and they haven't had time to specialize. Their job as early employees is, in effect, to identify an opportunity, adopt those roles needed, and codify the way the way those roles interact.

Then comes the disruption. The young generalists have successfully created a product offering, built a company skeleton, and, in the process, made themselves irrelevant. The head of sales, who was hired without a title, created the role and has no real sales experience, has carefully identified that the target customers. Is he the right one to become VP of sales and manage a force? When the company is trying to move as fast as possible, how much training on the job can a company take?

While this appears to be a risk for the young generalist, and perhaps recent MBA, it could be an opportunity. Marisa Meyer joined Google as employee 20 and is currently the youngest CEO of a fortune 500. While, I don't know enough about her role to ascertain whether she was a searching generalist or scaling expert, she was able to hold on to a meaningful position and rise with the company. Maybe the key to her success lies in the fact that I can't place her role. As a young artificial intelligence engineer, she may have had the unique capability of being able to deliver during the broad shaping period and deep growing one.

You can't change the people you've hired very easily, despite how dynamic the rest of the company is. That becomes clearly evident when a company switches from searching to scaling. Yet, within the conundrum may lie an opportunity to those who can deliver on both sides of the chasm.