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Andy Grove’s “High Output Management” was my go-to book during my early days as a manager. Andy had a similar background to mine – he was an immigrant who got his doctorate in semiconductor technology, who later moved to management. He had an engineer’s analytical way of looking at management, which appealed to me. As some of you know, I started my career at SanDisk, a 5000 person company, and later was a Director at Rambus, a 500 person company. Both these semiconductor companies were started by or heavily influenced by people who worked for Andy Grove at Intel. They brought Andy Grove’s processes into these companies. These influenced my own management style.

After starting Chowbotics, however, I’ve grown to believe a startup manager often needs to focus on very different things compared to what Andy wrote in his classic textbook. For a startup to succeed, it needs to get 2x more done per employee per week compared to a bigger company with lots of resources – that’s a core value proposition for a startup. And good startup management is crucial to make this happen.

In this blog post, I will talk about different stages of a startup’s lifecycle. And how a manager’s focus at these different stages needs to be different. While the CEO is a manager too, this blog post will not cover the CEO’s skill development as a startup evolves – that is a subject for another article.

 

The Wild West

1-10 employee stage

When a startup is very small, the Founder/CEO typically manages all departments. There are no other managers.

The First Managers Arrive

10-50 employee stage

When a startup evolves beyond 10 people, that’s when the first managers arrive – these are usually department heads. The CEO often serves as interim department head for a fair number of departments in the startup, as the above figure indicates. Managers who are department heads typically have a few requirements.

  • Player Coaches – Startup departments are small, often less than 5 people. So, early stage managers are expected to contribute with hands-on work. They end up as player coaches compared to the regular big company manager who spends all their time co-ordinating or sitting in meetings.
  • Hiring Experts – Good judges of people who can hire superstars make an enormous impact. I’ve found articulate people who can inspire are crucial, since the startup often has little revenue, and needs to be sold on potential. An ability to hustle and hire is important too – just putting a job description up on an online hiring website and expecting superstars to come to you is a terrible idea – the best people are not looking. I expect our hiring managers to patiently comb through LinkedIn, find the best people there and inspire them enough to change jobs.
  • Work Culture Setters – In a young startup, an early manager makes a HUGE difference to the culture, thereby impacting the productivity of the whole company. At Chowbotics, we expect managers to be some of the hardest working people in the company, who set the pace and inspire their employees to push themselves. We also expect the managers to be people who believe in the company’s core values, who can inspire their employees to follow the values we care about (see picture below for some core values we have at our company)
  • Subject matter expertise – Startups often need to continuously evolve their businesses to reach product-market fit. A manager who understands their department subject well enough to have intuition and vision around it is absolutely necessary at this stage. Like my old CEO at SanDisk, Eli Harari, said, “If you have 3 directions in front of you and put 33% of your resources into each direction since you don’t have the intuition and confidence to put 100% of your resources into one direction, you reduce your progress by a factor of 3. A good manager who can make the right bets is crucial.” This ability to make the right bets is particularly important for startups since they don’t have enough resources.

The World Andy Grove describes

50+ employee stage

As startups grow beyond around 50 people, then it needs a different mindset for managers. You get to a stage where the manager/employee ratio for many departments gets close to 8:1. Player-coach managers often evolve to just being coaches. Delegation skills become a lot more important. An ability to create processes and playbooks for different functions in the organization becomes crucial, since it allows the organization to scale. Department heads need to get people whose abilities they trust in management positions below them, so that they can scale themselves as the company scales.

The company culture has evolved and stabilized by this stage, so the things I mentioned about culture at the 10-50 employee stage are less important. Product-market fit has been achieved as well. The company is chugging along down a fairly well defined path, so organizational skills for managers become as important as vision related to the subject matter.

The skills Andy Grove mentions in his textbook become more and more relevant and important.

Startup managers therefore need to evolve themselves and emphasize different skills and tendencies as their companies grow. It takes a special type of personality to grow themselves this way… as startup leaders, I believe we need to create a culture of continuous improvement to encourage this. We also need to clearly communicate skill expectations as the company evolves, to various managers in the organization – like I am doing with this article 🙂