Size-Appropriate Business Advice

December 31st, 2011 — 5:35am

As a bootstrap entrepreneur I’ve taken businesses from one-person basement startups to established companies. Along the way I sometimes felt that I should do things more like “bigger companies” do, but I always resisted adding those structures and formalities until I saw a clear need for them. I’m mostly glad I waited. Here are some things I’ve learned:

  • Startups are different than established businesses. I believe the highest priority of a startup is to find a business model that is scalable. Test the market with the lowest overhead and the most flexible structures possible.
  • Newer and smaller organizations have an advantage when it comes to innovation. They have less to lose, they can change quickly and cheaply, and they have to brainstorm a lot because they don’t have a standard answer to most questions yet. Use that advantage.
  • Most entrepreneurs hate bureaucracy, and that’s ok early on.
  • It hurts my entrepreneur heart to say it, but… There are valid reasons that “normal” businesses have things like written procedures, HR departments, meetings, and middle management. I didn’t need any of those on day one, but I need all of them now. These normal structures are solutions to problems that arise as an organization grows. I’ve found that waiting until we have the problems to implement the solutions has worked out well for us.
  • Even with size, bureaucracy is worth resisting. Insist that it adds value and is implement with efficiency and common sense.
  • I think as a leader of any size organization you are better off to think creatively and dare to be different, than to feel obligated to imitate normal and/or bigger organizations.
  • The wisdom is in knowing when to follow a best practice, when to innovate your own solution, and when to do without entirely.