Scaling a Startup Team

I’m the CEO and co-founder of Preply, a global marketplace for online tutoring. I’m lucky to have awesome co-founders, Dmytro (CTO) and Serge (Product). Together we started Preply in 2013 and had been bootstrapping until we joined the Techstars family in 2015. We then started growing our team.

Here are some helpful takeaways from our journey as you start to grow your startup team.   

Changing Roles of Co-Founders

Your role as a co-founder of the company is not static and will change over time. Here are a few stages you may experience:

  • Operator. You are doing things yourself, whether it is email marketing, coding, designing or supporting customers.
  • Early manager. You have your first people on board. While still doing a lot of things on your own, you start learning how to be a good manager.
  • Manager. You stopped doing most of the things and focus on being a good manager.
  • Executive. You manage other managers across your company. From this point, you don’t have control over execution; you have to rely on your managers.

Three observations:

  • The essential skill of being an entrepreneur is fast learning. It’s difficult to overestimate it.
  • When you stop managing operators, it’s the right time to start thinking about building the right culture. It will be one of the few ways to impact your company. Someone said: “Culture is management on a scale”. I cannot agree more on that.
  • Start preparing yourself and co-founders for management and executive roles earlier. In the end, it’s a difficult transition with entirely different skill sets. You have to learn how to hire, delegate, teach, develop, and build the right culture.

Hire Finance and HR Earlier

We hired Finance and HR functions early, and it helped us a lot. First of all, I freed myself up and spent much more time on building the right product and marketing. Thanks, Jens Lapinski (MD, Techstars Berlin 2015) for that advice.

Secondly, people I hired were much better than me in building the right finance, HR and hiring processes. That helped to make fewer mistakes and grow faster. Here’s a good piece of content by Christoph from Point Nine Capital about the right timing and importance of hiring HR.

Hire the Best

You can read about hiring the best people in a lot of books and blogs, and it’s imperative. One wrong hire can significantly lower your chances to be successful. At the same time, I believe that old school rule “hire slow, fire fast” no longer works.

That was a safe option, but in our competitive world, the ability to hire fast is crucial. So, you better learn how to do that properly.

Here are a couple of resources that helped me in my journey:

  • Hire for strength rather than lack of weakness: Hard thing about hard things.
  • It’s worth spending time understanding what the key questions are that you want to ask a person for them to make an immediate choice. Here’s a legendary blog post with a good list of questions for hiring a product manager by Ken Norton, a partner of Google Ventures.
  • Paramount book about hiring: Who: The A Method for Hiring.

Another moment worth mentioning is that you have to build the right expectations for your leaders and co-founders about future hirings. It should be apparent for everyone that the company will hire new experts, managers and executives as it grows.

People that can lead the company today are not the same people that can drive it tomorrow.

Also, your ability to hire the best is growing as your startup grows. The most important thing here is to make sure your current leaders will stay and learn from newcomers.

Additionally, I would encourage you to spend time meeting opinion leaders in different areas. They may help you with advice and their network, but also one day you may hire them. At Preply, we did a good job hiring the best people, because we were in touch with them when they decided to change their life.

Cross-functional Teams

In 2016, we had marketing, development and design departments. As we raised our seed round, Mariusz Gralewski and Arthur Kosten introduced me to the cross-functional approach.

A bit later, my co-founder Dmytro learned more about that at a Paris CTO meetup by Point Nine Capital (his event review here). We decided to test it, and the results were outstanding. It completely changed the dynamics inside the company.

In a cross-functional organization, you are building squads around specific metrics, not functions. For example, a team that is focusing on conversion rates may include:

  • Product manager
  • Product designer
  • Front-end engineer
  • Two full-stack engineers
  • Email marketer
  • Customer success manager

Such an independent team will move much faster in reaching their KPIs. Spotify did an excellent job explaining how such an approach works in their engineering culture: Video 1, Video 2.

If you are adopting such an approach, I would try to make sure that you have T-shaped PMs to lead squads. They would need to build excellent communication within the team, so everyone understands what, when and why.

The beautiful part here is that a cross-functional approach makes your life easier when it comes to scaling a team. Growing from five developers to twelve in a functional structure will give the CTO a hard time reorganizing everything and continue to distribute tasks from the product, marketing and sales teams.

With the cross-functional approach, PMs are responsible for managing. The CTO needs to be an excellent tech mentor and build the right tech culture.

I would compare the cross-functional approach with building a business accelerator. Every squad is an independent mini-startup, and your VP level people are mentors. As mentors, they will provide with the right focus, metrics and their expertise when it’s needed. The squads will then execute it independently.