Scaling up a startup – rapidly growing from say $2M to $200M ARR – is an exciting and challenging journey. You aren’t quite a startup anymore, but you’re also definitely not a big company. And given the high rate of growth, the nature of the job changes meaningfully over the course of just a few years. Few companies get to this point, and the time period is relatively brief: the strongest companies go from ~$1-2M ARR to $200M+ in well under ten years.
From what I’ve seen, there are a few traits that disproportionately lead to startup scaling success, and I actively think about them when assessing talent for the scaling journey:
- I look for these traits in people I work for or with
- I am wary of them in people I compete against
- I wouldn’t invest in someone who didn’t have them
- I especially would not promote someone to senior levels who didn’t exhibit them
They Are Unapologetically Competitive
The best startup people are highly competitive. They are always aware of their competitors, and even if they don’t react to the competition, they’re highly attuned to the landscape that they operate in. They’re also motivated by competition – when they want to win, they want to win. They aren’t necessarily competitive all the time – they aren’t stiff-arming their own kids in the backyard. But when they do choose to compete they are savage, and as a result they really only have two modes: not competing, and fighting to the death.
Being competitive is a prerequisite to scale a company past $200M ARR, and there are big, long-lasting challenges on the journey that can only be overcome by even longer-lasting competitiveness.
The first problem is that if you aren’t competitive, you fundamentally aren’t ready for the dynamics of winning in tech markets. Virtually all markets are ultimately dominated by just a handful of winners in even the best case. Your money will be taken out of your hands by others, unless you cut their hands off first. This is unpleasant to confront, but inability to confront hard market truths is often fatal.
The second is that the impulse to compete outlasts almost all other desires. It’s a lot easier to run out of stuff to buy than it is to quiet the voice saying “you need to win.” I find that the greatest startup people stay hungry for as long as they have opponents to compete against.
As a result, these leaders are unapologetic in their competitiveness, because they’re in total zen harmony – the market demands that they compete like rabid wolverines, and that is completely in keeping with their personalities.
Obsessed With Forward Momentum
The best startup people I know are excited by small wins. They’re excited about the smallest deal, they’re excited about every renewal, they’re excited about each incremental positive feature. They love big wins but derive emotional fuel from the small ones. There are a few reasons why I think this is the case.
People who have truly driven real wins know that achievement comes from thousands of tiny steps. Sure, huge step function improvements are great – but victory is determined in the trenches with every incremental deal, every small polish feature, every rapidly resolved support ticket.
But people who have only seen wins (but weren’t instrumental to their success) often don’t realize this. To them, that great win came from magic:
- We built a better product
- We had the better sales strategy
- We had the best brand
In reality, the great victory came from the momentum of the tiny wins:
- We built a better product by fine-tuning our engineering hiring, minimizing management whiplash, supporting teams with great designers, and defending a product development process that balanced quality and speed well.
- We had the better sales strategy because we rigorously tested our positioning and trained our reps to be able to execute on it flawlessly, and then we fine-tuned our demand gen to maximize leads within our ideal customer profile. We also just worked our butts off and made twice the calls, and our reps (almost) always actually put relevant information into Salesforce, because diligence is part of our culture.
- We built the best brand because we have the best customer support, and our product works the way we say it does – the product of thousands of tiny optimizations. We also have avoided spiking costs like crazy over the years, and have invested in hundreds of cost optimizations to allow us to do so.
The best startup scalers are single-minded about maintaining momentum, and their hunger for small wins doesn’t cause them to lose focus on longer term goals. Because they know the road they’re on, they’re comfortable driving in a snowstorm when they can only see five feet ahead.
People who are obsessed with forward momentum can also go much further before they get burnt out or give up. The startup journey often doesn’t provide anything like a grade at the end of a semester – this drives many people completely crazy. If you’re excited by each small win, it’s easier to handle putting one foot in front of the other for years.
And finally, there’s a certain type of upward-managing, highly corporate animal that is allergic to small wins. The compounding momentum of thousands of small wins is what actually leads to a huge outcome over time; but if you’re at a big company that’s not how you get promoted. At a big company, a bunch of small wins leaves you forgotten – what you need are a few very visible wins that can round out a promotion packet. Unsurprisingly, this doesn’t translate to successful scaling.
Equally Comfortable With Both High and Low Granularity Thinking
The best startup scalers can bounce between different levels of detail. For example, they can walk into a product review and talk about how the ordering of the buttons on your UI is confusing, and then walk into their next meeting and talk about the org chart requirements for next year’s business expansion. They have a wide range of competence.
Successfully scaling is truly an odyssey. You begin it as a startup, and you essentially end it as you become a corporation worth billions of dollars (if you survive). As a result, you need to build and actively use a wide array of skillsets. High-level strategy at $1M ARR might consist of a great new product that strengthens your product-market fit; high-level strategy at $100M ARR might mean acquiring a competitor or changing how your team is compensated. The best scalers have the ability to grow with a company and evolve their skillsets.
But it isn’t enough to just have the ability to grow your skills – you also need to be comfortable using the full range of skills that you learn. There are two traps that I see people fall into:
- People who only want to think about high strategy – often long-time executives who only ever do multi-year planning, talk about market positioning, departmental reorgs, and future partnerships. They can be strong at strategy while having no idea what sort of customer support issues their company is facing.
- Highly detail-oriented subject matter experts who can go miles deep on a problem, but are clueless when they need to look up towards the horizon. They can crack super-hard technical problems, but sometimes have no concept for where their business needs to go in the next 6 months, let alone 6 years.
The reason that a lot of people focus exclusively on broad strategy or tactical details is almost always due to ego:
- I’m too strategic to deal with the details.
- I’m a technical expert, and my details are the most crucial. This can morph into an even more toxic attitude – the only worthwhile job is what I do.
In both cases the same theme is mirrored: It’s not my job to span the full scope of the business. The best startup people can and must deal with both big picture strategy and small picture details. When you see someone who’s a decathlete at all of the skills that go into scaling a startup, it’s a truly formidable sight.
Finally, while it’s a prerequisite to be strong in both details and the big picture, I’ve found that the best leaders can also pivot extremely quickly between low- and high-level thinking. Think of someone switching between very strategic and very tactical matters in the course of one conversation, without their head spinning.
Takeaways
Some people are born with the traits listed above, and some people aren’t. This is generally fine, because they’re all trainable or testable to at least some degree.
If you aren’t naturally competitive, keep in mind that your market probably will devolve to winner-take-most, and use that fact to guide your decision-making. And make sure that you hire people who can bring the competitive fervor that you might naturally lack. Test for this by asking about competitive environments people have worked at in their past – competitive people are itching to talk about their past battles and you can usually see the bloodlust in their eyes.
If you aren’t excited about small wins, try to set up internal systems that track how small wins compound into big ones – for example, dashboards that show how you’re reducing support tickets or generating more pipeline. And try to learn more about the details of different functions – this often creates a much deeper appreciation for the small momentum-building plays that make the business tick. This trait is hard to test for, but can be trained because it’s more of a habit than a personality trait.
If you’re having trouble with high or low granularity thinking, realize that both are equally important muscles to build. And never say “that’s not my job.” Test for this trait by discussing a mix of high and low granularity topics in quick succession – switching altitudes like this makes many people visibly uncomfortable, but the best will thrive because they love the variety and mental stimulation.