Learning to lead a start-up

Prior to launching my company, I had spent several years in a management position for a huge company, and I had also completed my Masters in Business. My experience and qualifications indicated to most people that I possessed the ability to undertake any senior management role; that I was a leader.

However, I didn’t learn to lead throughout my years in corporate management, nor did my education teach me how to lead. Rather, I I learnt how to be a leader in the years I spent building something out of nothing.

There is a massive difference between having a commercial entity that allows you the flexibility to hire top people in your field, and running a start-up where you absolutely need the right people, but likely can’t afford to pay them their market rate right away. Leading a start-up is a very different ballgame, one that is played without safety nets or HR.

I recently had a conversation with Chris Ridd, Managing Director of Xero, who shared his experience of making the decision to move from the safety of the corporate world to the uncertainty of the start-up world. Chris said that, having made that decision, he faced a huge culture shock; something he was largely unprepared for, but willing to tackle. As Xero continues to become more successful, it’s apparent that Chris navigated this culture shift quite well. However, his point remains, that leading a start-up is an entirely new world – you are leading based on passion, vision and the reality that sometimes things will be so hard that you’ll be living off the smell of an oily rag.

The journey is very much a commercial and emotional rollercoaster, punctuated by constant lessons. I remember start-up visionary Paul Graham saying, "Running a start-up is like being punched in the face repeatedly, but working for a large company is like being waterboarded." I gladly chose the daily punches. I had to learn to identify the type of people who could take the punches alongside me, and who could help to grow the company from start-up scale. However, I also had to ensure the timing was right to get these people on board – too soon and I wouldn’t have the resources to keep them; too late and they’d have been snapped up by another start-up.

Often, you will muse over someone’s impressive resume and interesting career path, and it can seem really attractive to try to poach this person. However, despite what it says on paper, they may not be the right person for your start-up. The right people have a few things in common – they are prepared to thrive in a start-up environment, maintain momentum, and survive the valleys. No one can learn these characteristics in an entrepreneurship class or by watching inspiring YouTube videos; they are often innate. You get results when you lead people who are driven to see your vision eventuate, to be commercial and to be impactful.

Learning to lead a start-up requires a balance between passion and ability – one cannot outweigh the other. Some people with passion are best off only being cheerleaders, and some people with ability are best off going somewhere else where they have less personal pressure.

Your relationship with your team will be very different to the relationship between a boss and their staff in a large corporation. You need to know that your employees have your back. More than likely you don’t have the flexibility of funds, the time or even the headspace to get the wrong person on board. In saying that, it does happen, and part of leading a start-up is knowing when to remove people from the company structure that may be hindering its growth; either by not understanding the company’s vision, or because they are simply stagnant in their role. Part of the passion that goes into a start-up is all about being nimble, innovative and wanting to move quickly while also building a sustainable base, and to do this requires certain people who play the right parts. As your company evolves and changes, its dynamics and needs inevitably change too.

I often see motivational Instagram images of entrepreneurs with their teams popping bottles of champagne on their yacht, where everyone looks happy, shiny and well groomed. There are moments in the life of a start-up that will emulate those images – they are great moments of accomplishment as you watch milestones you never thought you would reach become part of your daily life. However, it’s the side you don’t see on Instagram that really defines a start-up; the times when everyone needs to pull it together to get through a difficult season, or move forward somehow when everything just seems way too hard. If these moments were snapped, those images are where you will see the real unity in your team, and the real moments of visions aligning and opportunities unfolding. Those are the moments that build the solid basis of something great, but also the moments that indicate when a member if your team is no longer ‘with you’ in your journey. You need to see these moments with clarity and take note of them. Although they are less exciting and glamorous, they are the ones that actually allow you to identify what you are building and showcase whether or not you are leading well in your start-up.