Your First Management Team Probably Won't Scale Up With The Company
Startup Codex

When a startup grows, all employees must grow with it.

The company's objectives increase, the teams grow, and the responsibilities of the managers reflect this evolution.

With inevitable consequences: some of them will not be able to keep up.

Jason Lemkin discusses this in his post. According to him, any founder will be lucky to keep half of his management team when the company reaches the $8 million ARR mark.

When the startup starts to have traction, the founder spends between 20 and 50% of his time recruiting. I've experienced it first hand and it's an aspect that is often underestimated.

Not all the managers recruited will be able to grow with the company. "So even once you hire your first management team, you can't really take a break there," says Lemkin. You need to have candidates available all the time.

Lemkin goes on to describe how the CEO will have to part with some of them when the stakes get higher. While others will burn out after a few years of investing all their energy.

"And those Year 5 Goodbye Parties? The toughest ones of all."

A good read to keep in mind the importance of never relenting in your efforts to recruit.

For 90% of us, one of the toughest adjustment to being CEOs of SaaS companies is having to constantly recruit.

Once you have Initial Traction at least, you’re going to have to spend at least 20% of your time recruiting.  More on that here.  And really, 50% would be even better.  As soon as you have something in SaaS, you have to stop being an individual contributor as much as practical.  Stop being a functional VP-as-well-as-CEO as soon as you can.  Let it go.  Hire those folks instead, as soon as you can afford it, and have Initial Traction.

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