Tip of the WeeK: Avoid Twitters Trip-up

Here is the headline in the Wall Street Journal, May 26, 2009: "Twitter Trips on Its Rapid Growth".

The story is about a common problem that hits startups run by first-time entrepreneurs: The startup suddenly takes off but the needed management (vice presidents and directors and managers) are missing.

Success arrives without warning. Boom! Customers rush to use or buy. Up shoots demand for services or products. Shock hits the startup staff. Everyone rushes to keep the web site from crashing, to avoid customers turning angry, to keep the media amazed, anything to keep the roaring rocket continuing to accellerate.

The organization becomes a wild collection of people rushing about with little time to think. They just do what needs to be done to survive each day. There is little time to do anything else.

So what are the CEO and core management team doing? The same thing: anything to keep the roaring rocket continuing to accellerate. They barely have time for five hours of sleep a night.

So  what is wrong with this situation? After all, success has arrived!

Here is what is wrong: There is noone with the time to work out the strategy for the company's next years of growth, to work out the branding messaging, to find and negotiate with strategic customers, to plan and build the architecture for the next level of telecommunications needed to support doubling the number of customers each year, to plan raising the next round of venture capital, and so on.

In other words, the core team has run out of skills and time to do what is necessary to build a company that can sustain a huge rate of growth, can scale ten times its present size and attain profitability and positive cash flow. The vice presidents with business experience are missing. The special skills needed to build a great company are absent. And everyone on the board of directors knows it.

The trouble is, the management running the company has neither the time nor the experience needed to find and recruit the missing management.

This can kill a startup. Either the wheels come off and it crashes. Or the tiny, inexperienced management team burns out and gets replaced (probably kicked out).

How do you avoid this portend of disaster? That's easy: plan on day one who is missing, when you will hire them, how you will recruit them, and when you will replace yourself.

I find that takes more wisdom and courage than most people have. But serial entrepreneurs do. That's how they have become successful. I recommend you do the same.

BOTTOM LINE: Plan your hiring of your middle management on day one. Name the jobs, give dates for their hire and the recruiting cash expenses into your budget. Then you will be ready to act when success jumps up to surprise you. That will keep your rocket accellerating. When you can do that, you'll have added a powerful element to your unfair advantage.

Comments

[Aaron]

good advice. twitter has had many issues. One especially people have noticed is technical competence. Apparently they don't know much of about building scalable systems it took them a great while to figure out how to support all the users they have now got and people still see the system going up and down and lag often. very much like myspace in the early days...popular idea but not a great tech team behind it.
Seriously though how are they going to make money cause i still can't figure that one out... maybe its another field of dreams scenario "if we build it they will come and we will figure out a business model later"