Naked Startup

Starting a company and scaling a company are two entirely different jobs

Introduction

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Tony Cappaert

Co-Founder & COO at Contactually. Ex-Microsoft PM. Amateur social psychologist. Trying to be authentic & intentional every day. Slowly learning from my mistakes.


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General

Starting a company and scaling a company are two entirely different jobs

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When we started Contactually in 2011, we had no idea what we were doing.

We sort of had an idea, but we couldn’t articulate what problem we solved for customers. We knew we had to reach more users, but we didn’t know how. We knew we eventually had to make money, but we didn’t know how to build a sales team (or even if we should charge customers). And prior to incorporating the company, we’d only known each other for four months.

When I look back on it, I find it crazy that anyone ever bet on us.

But in hindsight, the three of us had one thing in common that defined our success in the early years: we Got Shit Done.

What GSD looked like at Contactually

Zvi and Jeff — my two co-founders — are two of the strongest developers I know. But more than that, they can ship – and do it fast. I can remember many times signing off Hipchat at 10pm, only to find that by the time I got back online the next morning, a whole new feature would be built.

They weren’t always the prettiest features. And they often still had bugs. But it was something. It was progress.

As the non-developer of our trio, I was responsible for getting more users – and eventually growing our revenue.   I’ve never been a marketer. I’ve never been a sales person. But – if I’m allowed a moment of hubris – I am a great project manager. I can break a problem down into discreet steps, implement those steps, and churn out a basic process or system that works.

Like our overnight features, these processes weren’t always the prettiest or the best. But they got the job done. And as we iterated, we were able to turn these initial efforts into the basis of our sales, marketing, customer success, and support teams.

Our initial success as a company was due to the fact that Zvi, Jeff, and I moved quickly and got shit done. But in the years since our start, I’ve learned one important thing: getting shit done isn’t enough.

In the first few years, we made our first hires and grew the team. By the end of 2014, we were around 25 people. And that’s when we started to experience some growing pains.

When GSD isn’t enough

Up until that point, getting shit done and moving quickly served us well.   We were a small team, and acted like a family. We worked together. Played together. Occasionally partied until 4am together.

As a tight-knit group, our company goals and priorities were clear to everyone. We didn’t need to go out of our way to communicate them, because we were all sitting within 15 feet of each other.   If I or anyone else saw something that needed to get done, we’d just do it.

But once we got to about 25 people, we could no longer all sit around the same table. And that’s when things started to break.

As we scaled, ensuring that everyone was aligned became harder and harder. Our priorities as a company started to become less clear. We started to step on each other’s toes. Balls started getting dropped.

As a result, the morale of the team started to dip – and good people started leaving Contactually.

I don’t think there was any one thing that led to this downward spiral, but it became very clear that the company needed to change.

Contactually no longer needed us — the founders — to be soley focused on getting shit done. We needed to be the leaders who enabled and motivated the team to get shit done.

I prided myself on my ability to analyze problems, solve them, and implement solutions. And that worked for years. But as the company grew, the impact I could have on the company’s success was dwarfed by the impact the rest of the team was able to make.

I needed to grow into a leader.

Founders need to scale with their startups

I could (and plan to) write a whole separate post about the steps I’ve taken to try to grow into the leader Contactually needs and deserves. As founders, we’ve invested heavily in growing our individual leadership skills, and have focused on ensuring our team has what they need to be successful. Morale has improved dramatically across the board, and is currently at an all-time high.

But in the interest of brevity, I want to focus on the thesis of this post:

The skills required of founders in the early years of a startup are very different from the skills needed to successfully scale.

When starting a company, the most important skill you need is the focus and tenacity to get shit done. We were fortunate in that we already possessed this natural tendency, and Contactually succeeded in the early days as a result.

We all know that the vast majority of seed-stage startups fail. I believe one of the biggest reasons for this high rate of failure is because many of these founders don’t possess – or at least don’t fully utilize – the one skill that truly matters in the early days. They don’t get shit done.

The majority of early-stage founders don’t GSD, and their companies fail as a result. Similarly, I’m convinced an equally large percentage of founders that start to scale will also fail. But instead of failing due to lack of execution or GSD, they fail because they couldn’t successfully empower and motivate their teams.

The skillsets are radically different. As an early-stage founder, you can get by as a great individual contributor. You’re smart, you work hard, and you’re able to achieve some initial success. The company lives and dies by your efforts.

But as the company scales, your individual efforts don’t matter as much. If you’re still a great individual contributor, but you haven’t taken strides to ensure the rest of your team is able to be great too, you’re going to fail.

It’s all about leverage. If I’m individually super-focused and productive, I can get 40-60 hours of work done per week. But what if I instead take the bulk of my time to ensure that the team has clear goals, everyone’s aligned, roadblocks are removed from their path, and they’re happy and motivated?

The best way to leverage my time is to empower my team.

How do other founders do it?

The reality is, even as I write this post, one word sticks out in my mind: hypocrite.

Who am I to provide advice and perspective on how to successfully scale a startup? What do I know about leading or motivating a team?

The truth is, I’m learning as I go along. I’ve made a lot of mistakes, and I still constantly need to refocus my time and energy on my team. I’ve been lucky in that we have a handful of great advisors at Contactually, and they regularly call me on my bullshit when they see me slipping.

In other words, writing this post is as much for me to reflect on what I’ve learned and where I need to continue growing, as it is to share that advice with others.

But I still have an open question kicking around in my head: how do other founders do it?

Andreessen-Horowitz is famous for primarily investing in founder-led startups.  And when we think about the most successful tech companies out there today – Apple, Amazon, Facebook, Microsoft, Google – all are or were led by their founders for decades.

How did these founders make the jump from individually GSD to empowering their teams?

I’m inclined to think very few founders – even the Mark Zuckerbergs and Larry Pages of the world – are natural leaders. I’m convinced they were great at getting shit done, but needed to develop the skills to empower and motivate their teams.

I’d love to learn more about how they did it. And if you’re a founder reading this, I’d love to hear your experience scaling your skillset with your company. Please drop your thoughts in the comments, or shoot me a note at tony at contactually.com.

profile

Tony Cappaert

http://www.contactually.com

Co-Founder & COO at Contactually. Ex-Microsoft PM. Amateur social psychologist. Trying to be authentic & intentional every day. Slowly learning from my mistakes.

Comments
  • user

    AUTHOR Russ Stalters

    Posted on 8:55 am March 23, 2016.
    Reply

    Great article Tony. I was impressed at your ability to reflect on what happened and that you realized how to change. I am a Contactually customer and I love to help people grow their skills as leaders as a John Maxwell Team certified coach, speaker, and trainer.

    I would welcome the opportunity to help you and your team.

  • user

    AUTHOR Corey Blake

    Posted on 7:08 am May 6, 2016.
    Reply

    Tony, I’m appreciating your post here. I’m the founder of a ten year old storytelling company and in the early days I was grinding. I was fast and furious and clients each thought they must be our only customer because our response times were incredible. As we were growing in the first few years I made the mistake of believing everyone would grind as hard and fast as I did. And if they didn’t I viewed that as a problem to be fixed.

    We are now a team of forty and I’ve dramatically changed, especially in the past few years. I had to learn to manage the intensity of my emotion so it could be leveraged to support the team. That didn’t come naturally. It came from learning from coaches, therapists, and a couple world class programs for leaders that I’ve been fortunate to go through.

    Again, I appreciate the post and the language around GSD. It resonates with who I used to be and the role I still enjoy jumping into at times.

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