The Startup Way: How Entrepreneurial Management Transforms Culture and Drives Growth

by Eric Ries

In the typical organizational structure, who’s in charge of grappling with uncertainty, unlocking unexpected and dramatic new forms of growth and impact, translating research insights into viable products, and harnessing the forces of disruption in the organization? For small organizations, it is clearly the founders. But once an organization grows large enough, the honest answer usually is: nobody. But even if there was somebody, what, exactly, would that person be in charge of? The lack of a system for acting on new ideas is a huge problem for existing corporations that have had decades—sometimes longer—to become encumbered by layers of bureaucracy or hampered by burdensome “this is how we’ve always done it” practices. But the problem is also not all that uncommon in hypergrowth startups. At the end of their incredible expansion, the original employees, who personally lived through the early stages of the company’s development, are vastly outnumbered by the employees who did not—often by a factor of five or ten to one. Imagine where all those hundreds or thousands of new employees used to work. How many, do you think, were part of the extremely early stages of another successful startup? The law of large numbers says very few.