Company building: how to transition from short-term survival to long-term sustainability

About two to three years post launch, companies typically undergo an interesting transition: they’ve made it through the survival phase and are maturing. It’s time to focus on building a company long term.

For most companies, this is a hard transition to make. In the early days, the goals were crystal clear: Survive! Find product-market-fit! Get to the next funding round! This is a very short-term oriented phase; there are emotional ups and downs with each win and loss, along with an incredible sense of urgency. During this stage, employees form a close knit team. Everybody is involved with a little bit of everything. There’s excitement every day.

Then, somewhere between the A and B round, a company starts growing up. The super motivated team of “swiss army knives” starts settling into more specialized and compartmentalized roles. It’s usually around this time that a start-up brings in senior management, adding a brand new layer and hierarchy. There’s more process, less excitement. And, the focus inevitably shifts from daily survival to quarterly goals and yearly budgets.

It’s only natural that some of the earliest employees will leave during this phase, either because they prefer the rush of an early start-up to the stability of a larger company; they’re bored or unhappy with their new (and specialized) position; or they simply can’t scale in the same way the organization scales.

With all these growing pains, it’s very important that the founder/CEO can step up and steer the transition from short-term survival to long-term company building. A few things become extremely important at this stage:

  • Clear company vision and mission: Why are we doing this and why does this company matter?
  • Rhythm: How do we find the right rhythm for setting and executing against quarterly goals?
  • Accountability: How do you drive accountability, when the layers and process of a larger company can make people feel less accountable? How do you break down the company goals into Objectives and Key Results?
  • Talent/employee development: How can you grow, develop, and motivate employees so they stay engaged for a long time?
  • How do you celebrate the little wins and the continuous (but small) progress? How do you recognize all the people who make the company a little bit better every day?
  • How do you as the founder/CEO set Big Hairy and Audacious Goals (BHAG) from time to time to push the organization and maintain the sense of urgency that can so easily slip away with long-term goals?

From AbeBooks, I know first-hand how difficult this transition can be – and, it’s a very common discussion topic with our later-stage portfolio CEOs. You can breathe a sigh of relief if you’ve made it out of the early-survival stage, but recognize that this next stage brings a unique set of challenges. It may be difficult, but it is possible to keep things meaningful and people engaged as you grow.   

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