What happens to startups?

In my professional life, I've had the chance to witness, or even to participate in, several startups and small enterprises. As a long-time observer, I've been able to monitor first-hand what they had become.

At the beginning of most companies, there is usually a group of friends. They spend lots of time and efforts to define the role and positioning of their organization even before its inception. When the corporation is set up, everyone is so involved in it that they spend night and day working to make the project succeed. If realization is coming, everyone is so implicated in answering emergencies to sustain the development and growth of the company that no one even consider role definitions: all founders and first-generation staff keep on running together to make their corporation go forward. The general feeling at this time is "we're not very organized, but we're efficient. When we get more structured, we're gonna be even better."

Then the organization starts to hire more people. These new hires are attracted by the positive image and the growing business of the startup, but not all of them share the stamina of the founders. As the company grows, the need for a better role definition settles in. As a friend told me once: "the goal of a job description is actually to define what you don't have to do." As administrators take power, the founders and the first-generation staff lose enthusiasm. They even lose energy. They get demotivated: "bureaucracy settles in, everything becomes so complicated; things were easier when we were just a gang of friends making all decisions around a single table," they say. Sometimes, founders and original staff even get into fighting against the new executives who came into power, considering they are ruining the spirit of the company by drowning everyone into slow decisions and endless procedures.

If nothing is done at this stage, the startup spirit has already vanished, employees spend their mandatory time at work and no more. The best way to see this is to check parking lots occupation before and after office hours: they become empty! Most employees stop taking any initiative. At this stage, the founders and first-generation staff are leaving, as they no longer feel they belong to what the company has become. Next steps may vary: bankruptcy, acquisition by an even larger organization bringing even more bureaucracy, or even a slow decline, etc. The most positive outcome may be spinoffs: people leaving from the now too large organization to set up their own. And restart everything all over.

This evolution is what I've seen in many organizations. I can only be sad to see this happen as the energy from the beginnings vanishes. But I'm afraid there is no solution in sight… Or maybe refer to a great thought leader of capitalism: "The revolution is like a bicycle, when it stops it falls," said Fidel Castro.

Image credits: Bing image creator