The Start-up Diary Part 2: Founder Depression
Premise: you are the CEO of a hot and well-funded start-up, in your early twenties to thirties. The press has started referring to your company as the next big break to watch. Sounds all good? Not quite. Investors are pushing fervently for more and more growth, but you are unsure whether the company can technically and operationally handle the expanded amount of service. You don’t know which business processes can stay relatively unchanged and which need to be upgraded. You can’t tell who in the firm is delivering good services and who isn’t. Worse still, time isn’t on your side. All of these quickly pile up while you are pushed to the edge of your nerve. Eventually you suffer from the “founder depression” syndrome *
Whilst start-ups with different business models will face their own version of process inefficiency, the root cause is rather similar. It starts with a lack of high-level oversight of the evolving end-to-end process and the objectives. This, in a start-up context, happens rather easily. After each stakeholder meeting and each new growth target, process objectives need to be adjusted, but start-ups are usually too concerned with product development and the growth itself to notice such needs in time.
A good real world example we encountered was a financial approval process that was causing a process bottleneck at one of our clients. The original small company limits on who could sign what had not grown with the company causing backlogs in the process; this should have been delegated with more tiers lower in the hierarchy. The firm was able to grow, but such growth was gradually becoming unsustainable.
Solving the “founder depression” syndrome, therefore, can first start with stepping back from the problem and building a map of the services and processes within the organisation as a top-down exercise. Next, assessing the process’ performance against the overall organisation high level objectives subjectively can highlight key areas for attention. Once this is done, we then take a deeper dive into these areas of concern. Understanding the required key service levels and/or performance indicators for each sub area, and where needed, measuring them and tracking them will help tackle the root cause of issues. For wider end-to-end issues, a critical path analysis can also help identify key points within each process where the measurements of performance, if out of line, will have a disproportionate impact.
It is almost a given that for some start-ups to go big, many will fail – that alone is enough for founders to feel blue. For a better peace of mind, keep an eye out for not just your growth targets, but also how such targets affect your processes as a whole.
*”Founder Depression” is a term coined by Sam Altman, Y combinator president.