The 3–10 rule & what sequoia taught me..
We, at CIIE have an update presentation of incubatees every quarter. The best part about this is that previous incubatees are not just invited, but they actually attend and talk about their current challenges. I am talking about innovative companies like Vmukti, Ecolibrium, Grid bots and many more which have created new market niches & been dominating them since inception.
One of the common challenges they have faced, and some of them even currently do, is during scaling up. It is hard when they grow from 5 customers to 500 to 1000 or from 10 employees to 40 or to 100 or from a single city to tens of countries, governed by different perceptions, expectations and way of doing things.
Scaling up is the best part about your startup journey, they said.
You are already a growth story and people are giving you attention, picking up your phone calls, promptly replying to your emails and listening to your pitch twice if that is what it takes to keep you interested. How could a growing company be bad? How could that have challenges? This time around, it was first time for Gridle and nobody had a clear answer to this problem. Not having a clear answer is common in startup ecosystem, but this was just too ironic. No answer to such problems during the amazing joy ride that your company is going through! None.
Ranjit Bhatia is an investment analyst at Sequoia Capital India. I was having a conversation with him post he displayed interest in investing in Gridle through our profile on Lets Venture & Angelist. “If you want money, ask for advice” they said. Silicon Valley runs on this! So, I did.
I asked him about this problem and he gave me a rule, the 3–10 rule. When you are working alone, you are in complete knowledge of things. When you grow to 3 people, there is division of responsibilities and your way of working kind of breaks. When you grow to 10, the same thing happens and then at 30, you need internal processes and then at 100, you need professional HRs and then at 300 you need something entirely different. When you reach 1000, there is a good chance that you are not going anywhere for at least a couple of decades. Same is the case with customers. You yourself can take care of billing, reminders and support for 10 customers, but when it becomes 30, you need support systems, at 100 you need automated billing, at 300, you need support executives and so on and so forth.
He said that there is no sure shot way of having the perfect way of working together. You can use collaboration tools that exist, have deadlines or set targets, but there is no guarantee. The only thing you can do is to re-invent your company when it reaches those mile-stones. Customize your way of working together and revolutionize radically at every step. It takes investment in terms of time and energy to do that but that is the only way. You need to figure out what works best for your people or your customers. You need to invest into building your company culture and you need to not hesitate a moment before changing it to help make your company perform better.
This post has also been published on my official blog at http://yashshah.in