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Thursday, October 26, 2006

A few thoughts on growth in a start up

"Growth can be fun, if you are carefull"

Somethings that have been happening here at FDD and in life in general made my see some things really clear W.R.T. growth in an organization. There are two ways that a company can grow organically or by acquisition, with past experience of the latter I would have to say that acquisition is a hard road to go down, and should be weighed in light of the hidden costs and disruption vs the benefits you will gain.

The Organic growth path is not an easy road to run either, there is a statistic that 92% of the companies in Scotland have only 10 employees, there is a barrier at 10 employees which is hard to cross for most of these companies, as I have grown 5 companies from early doors to head counts of more than a 100 employees. I have had to manage some of the traditional issues of founders not being able to delegate or let loose the reigns of the company, this is a well known challenge for the start-up, and understood by the Venture capital community, I have touched on this in previous bloggings on growth. The key thought I want to bring out, was that as a company grows it needs structure but the structure in it self can kill the the very same dynamics that have made the company grow, I am not advocating a WL Gore or John Lewis's approach but I am say be very careful in how you build and apply the structure to the organization, best to have the initial structure in place near the very beginning as it will be hard to introduce the structure later in the companies evolution. The recruitment process can damage this as well I have seen hires that have introduced a whole level of bureaucracy into an organization that it can impair the companies ability to achieve its objectives and goals.



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