I've thought if I should make this video or not. Because the majority of founders dream differently than I do. I have reasons to want to stay a startup forever, whereas most aspire to build hugely profitable and disruptive companies.
But in the end, I think it's good to share my beliefs and experience in the hopes of guiding others in their journey. I also changed the angle from my regular setup to be in tune with the conversation.
So no matter if you want to run a minimalist startup or have larger plans, this video will give you some lessons you can apply along the way. But before I tell you my reasons for staying a small startup, I need to provide you with a bit of a back story on how my startup Jexo came into existence.
So I used to work for this great company for over 5 years. I was their first employee and have been part of it as it grew to more than 160 people and got acquired. That's where I met my partner Nikki and also where we decided to start Jexo. And there are a couple of reasons for why we went to do our own thing:
- First, the experience of working with Nikki in the same team for over a year was incredible. We knew we enjoyed working together, and when the time came for us to move to different teams as the company we were working for evolved, we decided to continue working on cool products together outside our 9to5.
- And secondly, I mentioned the company we worked for grown. That was basically another factor. It started a natural growth evolution away from the startup, small and nimble company. But Nikki and I were still pretty much looking for that startup culture and benefits.
So, in short, Jexo was created as a workplace playground where Nikki and I could shape the culture, work habits, and product quality based on our values and experience. The catalyst was not the same as most startups, like solving a specific problem or changing the industry. And I'm not bashing anyone here because it is absolutely reasonable to get started because of those things. But for us, we knew that with the right values and the right people on board, we can do and be what and whoever we wanted.
So today, we're a small team building cool project management products, making a lot of noise with marketing, and having fun along the way. And we want to stay a small under 15 people team for the following reasons. BUT, let me clarify before I get into this: We have achievements beyond our size, and having a lean, minimalist, and "forever-startup" mindset does not mean not pushing to achieve and evolve. It is actually the opposite: we want to have an impact in a smaller formation, so we always need to evolve and challenge ourselves.
Now look, none of these challenges are impossible to solve, but they get darn harder to fix as you grow. And you have to invest early on in building a proper ramp to support growing to 50, 100, or 1000 employees strong. Standards, practices, and structures that are meant to preserve your company DNA and help you scale effectively.
For us, we decide the best path is to not grow our team beyond a certain size because our interest is not in becoming a powerhouse or mega SaaS business, and we want to preserve our nimble and cozy feeling. And trust me, it is not easy, and I'll talk in a bit about the downsides of this approach.
The tabu topic of scaling companies is the fading values that once were strong pillars that the early team lived by. As you accelerate growth and bring on more people, and set organizational structures in place, there is a risk that values will be neglected, and overnight your company will feel nothing like the early days.
When you reach hundreds or thousands of employees and realize the culture is not what it's supposed to be, it is way harder to correct. A while back, I wrote an article on how to preserve company values by creating principles that your team will adopt and how to encourage the adoption of principles in day-to-day work.
But let's be clear, changing culture is not necessarily a bad thing. Each individual joining your team will contribute to the culture through their experience in previous teams. Your team helps evolve culture and your company values, and it is natural for you to adjust your written values once in a while.
What I mean by culture dilution is not having a strong culture that people get behind. Which ultimately leads to toxicity and bad habits because there's no common consensus of what people stand by.
Slowing down impact
In the early days, you'll have fewer standards and processes to govern the way things get done, so you're able to execute faster without constraints. You know the good old saying "go fast and break things".
Today, we're able to deliver work faster than our big competitors because we don't have overbearing logistical tasks on our plates, and we can focus on crafting awesome work that has an immediate and significant impact.
But does that mean we're more chaotic, riskier, and bound to break with lasting repercussions? After all, isn't that the reason teams set these energy-consuming standards, to avoid that one person pushing the wrong button and causing a total power blackout?
Not exactly, you see; we do have incident management processes in place, documented customer support way, established infrastructure standards, etc. These are not the overbearing processes, the performance tracking, the countless planning and alignment sessions across vertical structures. That's what stiffens speed and impact. But because we're a tiny team, everyone trusts each other to do their part and be on the same frequency when taking decisions. which again the team is empowered to do without much validation from myself for example.
Speaking of decisions, we're currently a super flat structured company. There is no line of reporting, no managers or "superiors," and the team is empowered to take decisions without much validation from Nikki or me.
You see, because there's just a select few of us, we're able to mentor and effectively have everyone adopt a mindset of entrepreneurship. And it all ties into the vision I mentioned earlier of creating a workplace playground. I'm not the one building a successful business, and everyone else is here to help me. I'm helping everyone in the team create success for themselves and build a great workplace at the same time. Everyone has stakes in the company, and it makes no sense for me to take decisions on behalf of everyone. We promote shared responsibility which comes with empowerment.
But this gets super hard to maintain when you scale. As you grow in size, work dependencies become more complex, and it gets trickier to adopt a "be your own boss" approach when say, 8 or 10 other engineers work on the same patch of land. Chaos and disputes can creep in, and you realize you need some kind of brokerage in place. And when you start introducing management, you automatically move away from the flat and empowered eutopia.
The founder connection
Being under 15 today means everyone has access to Nikki and me. Nikki helps the product team and the marketing and support, so everyone interacts with her every week. Same with me, because we don't have a large number of departments and projects simultaneously, it means I'm able to attend all the standups and planning sessions and engage with the team often. I also have one-to-one coaching sessions with each person in the team every month.
This proximity means it's so much more of a breeze to have all of us in sync and feel more like colleagues. Opposite to, for example, me being disconnected and seen as the CEO boss. I hate the term boss for so many reasons. But the proximity has another effect; everyone feels comfortable reaching out for a conversation about any topic whenever they feel like it, which I really appreciate.
This is really important for me because, in the previous company's early days, it felt so motivating to have the founders always there to hear me out when I needed their guidance. But as the company grew in size, that window of availability drastically narrowed down, with the founders having so many more responsibilities. To be honest, I've never been refused a chat due to a busy schedule; they have always done their best to accommodate my needs. BUT, very important BUT actually. Because the founders were now running a company of 100+, I felt it would be unreasonable for me to bother them when they have so many other things to deal with. And the few times I reached out, I felt incredibly guilty.
Add that's what I don't want for my team, I want my team to know I am always there to chat when they need me. And I wouldn't really be able to make that promise if I had 100 of them.
Is really simple! If I have to pay 100 employees, I need to make sure I make enough revenue to pay 100 employees, which is a lot of income to generate. I'd need to put strategies in place which are KPI heavy and have substantial sales quotas. This puts pressure on the team and would give me loads of sleepless nights.
Again, I'm not saying that having financial goals is bad, and there are ways to get there without getting all grey-haired. And we do have one financial objective: become self-sustained as we are now partly on investment money. But that's a very small objective and easy to achieve. Everything else we call them financial aspirations, we would love to get to this valuation and make this kind of ARR to afford more benefits for the team etc. But we choose not to set intense financial pressures on ourselves and just focus on what we love to do. Two of our values are: Love your craft and Value happiness, and we take them seriously.
I spoke in a previous video about how hiring in lower-income countries will have a bigger impact on your team's financial wellbeing. The same applies here. It goes such a long way if you invest financial growth back into the team with perks, bonuses, salary increases rather than hiring another person. Especially when you have such a high-performing team. Plus, as highlighted previously, the more people you hire, the less of an overall impact.
We also offer many share options to a smaller team which means everyone owns a more significant chunk of Jexo. This is important when you're nurturing a culture and mindset of entrepreneurship. And is soo refreshing to have a motivated bunch that all pull in the same direction and have the civic responsibility and care towards Jexo and eachother.
Now having the Forever Startup mindset and not wanting to increase the team size has downsides. Because like any successful and fast-evolving business, the natural progression involves breaking down bottlenecks into multiple roles, setting up new teams with well-defined missions, etc. And we encounter these expansion challenges often, but we navigate by focusing on impact and cutting down on low return activities. So prioritization and decision-making are critical for our team.
Right, I'm done for now. The reality is that growing a company beyond 50 introduces a lot of complexities and risks that you need to be aware of. What I mentioned in this video are my reasons to stay a forever startup. If you find it helpful, give it a thumbs up and subscribe for more videos like this. See you soon.