High Growth Handbook: Scaling Startups From 10 to 10,000 People

by Elad Gil

while many people have experience starting a company, very few have experience scaling one.

All startup advice is only useful in context, and I am a firm believer that the only good generic startup advice is that there is no good generic startup advice.

The thing that is so essential that people need to understand is that the world is a really big place.

Fortune 500 CIOs who pride themselves on discovering the next new whatever it is—the new relational database, AI, whatever it is. They’re all over it.

price it high, then you can fund a much more expensive sales and marketing effort, which means you’re much more likely to win the market, which means you’re much more likely to be able afford to do all the R&D and acquisitions you’re going to want to do.

What I’ve always found is this: give me a great product picker and a great architect, and I’ll give you a great product. But if I don’t have a great product manager, a great product originator—it used to be called a product picker—and I don’t have a great architect, I’m not going to get a great product.

Okay, how many great product pickers do you have, people who can actually conceptualize new products? And then how many great architects do you have, who can actually build it? Sometimes, by the way, those are the same person. Sometimes it’s a solo act. And sometimes that’s the founder.

hierarchies kill innovation for the most part. And I think that matrixes are just lethal in most cases. There are exceptions, but in most cases, you need original thinking and speed of execution, and it’s really hard to get that in anything other than a small-team format, in my view.

As CEO, you will need to find a way to get leverage on your time—and learn to say no a lot.

The very best executives tend to be a combination of a router (i.e., they send items on to other people for execution and end meetings with few to no action items for themselves), a strategist, and a problem solver (i.e., someone who can identify when the team is off track and dive in to help).

assemble a set of CEOs whose companies are at the same stage as yours, and meet them regularly for dinner so you can compare notes—you can learn a lot from your peers.

Information starts to get filtered by middle managers or hires from big companies, who view their job in part as shielding the CEO from “unimportant” information. The problem is that they may wind up shielding you from ideas that you consider quite important to know.

I think that founders should write a guide to working with them. It would be one of the pieces I’m describing, to clarify the founder’s role: “What do I want to be involved in? When do I want to hear from you? What are my preferred communication modes? What makes me impatient? Don’t surprise me with X.” That’s super powerful. Because the problem is, people learn it in the moment, and by then it’s too late.

Operating structures are not tied to any one particular process, but instead explain, “This is what we expect of ourselves, in terms of how we work.” And when you document things like that, new leaders, new managers, new people in the organization can say, “Ah, this is what’s important. Let me adapt my behavior as we scale to follow along in this structure.”

you can’t make too many things at a company mandatory. You really have to be judicious about the things that you’re going to require, because there just can’t be that many. There’s probably something related to performance and feedback. There’s probably something related to whatever your planning process is. And then there’s a few day-to-day tactical things, like a launch review. But you can’t have that many and you can only have one at each level.

most successful, high-growth, fast-moving companies are instead an environment of smart people who are all trying to optimize and do the right thing. They need some structural boundaries, but you can’t over-constrain them. And that’s why you want to have some high-level metrics that everyone’s steering toward, operating principles, a documentation of plans, and then a set of processes that you follow.

As your company grows, how you communicate information has to evolve, too. Don’t forget as you build these structures and establish a few processes that you need to have new communication approaches. Because not everyone is in the room anymore. What does everyone have to read? Where is all the documentation? Where is the source of truth? How do you use your all-hands meetings? How do you use emails from the leadership team? You have to think about all of that.

We started asking that everybody send out meeting notes as part of every meeting, so there was transparency in terms of who attended, what was discussed, etc. And one early person pushed back. It was an example where literally a week into it he was saying, “Oh my god, you were right. We should have been doing this all along.” There was a lot of resistance and a perception that it was micromanagement or it was us trying to track everybody in a nefarious way. But it was really just trying to open up communication.

if you believe in the wisdom of crowds or the fact that a smart group of people is going to make a better decision than one person alone, it’s a good thing.

you have to set expectations within the organization that they’re going to have to take the time to make sure that smart group of people is informed.

Sometimes that gets confused, though, because the group thinks they’re the decision-maker and that the goal is consensus. When really the goal is, “Let’s hash it out together. We may not all agree. One person will be the decision-maker, and then we will all commit to it.”

So how do you manage expectations and actually celebrate some of what is chaotic about what you’re going through? That’s my advice: figure out a way to get ahead of that and get people ready for inevitable changes so that you don’t have fears or concerns that are unfounded.

you want to find a balance between that long-term charter (“Why do we exist?”) and the short-term plan (“What are we going to do?”).

One thing that I have really thought about is the set of what I’m going to call “founding documents” that are really important for any company to have, especially as you get beyond, say, 50 or 100 people. That includes your mission statement and your vision, but also your overarching long-term goals. When we wrote that document for Stripe, I thought of as it the three-to-five-year plan. But we just called it long-term goals publicly in the company. And if you read those goals again today—and I worked on them, the leadership team worked on them, three years ago—they’re still the same. And I don’t think they’re actually going to change even in three to five years. They’re our long-term goals.

I think adopting some planning framework early will serve a company well. I was giving a talk recently at a startup, and they asked what operating processes I thought should be in place when. I told them that I’m not going to tell you which operating processes you should put in place. But I will tell you that you need them, and you need them sooner than you realize.

The analogy I drew was to games, or sports. I said, “You know why playing a game is fun? Because it has rules, and you have a way to win. Picture a bunch of people showing up at some athletic field with random equipment and no rules. People are going to get hurt. You don’t know what you’re playing for, you don’t know how to win, you don’t know how to score, and you don’t know what the objectives are.”

you need planning structures earlier than you think, and they should proceed all the way from the top down.

what are things that only the founder/CEO can do and which are existential to the company?

I’m not a micro-manager and I won’t sweat your details *unless* I think things are off track and if I do, I’ll tell you my concern and we can work together to make sure I understand and plan together on how to communicate better or right the situation.

when I am new to a project/team I often get into the work alongside people so I can be a better leader—I will get involved in details and be more hands-on early on in a new initiative and just be warned on that. It’s how I will know how to help if you need me later.

I take action items really seriously and I expect you to know what yours are, when they are due, and get them done. I don’t like chasing them but I do notice when things slip—it’s fine to renegotiate deadlines but I’ll be annoyed if it’s the day after the deadline....

I dislike being caught last-minute with people working hard on something we could have gotten ahead of—please help anticipate big work efforts and let’s be in front of them together.

I always like to know what’s going on personally with people so I can see the whole picture. I am a believer that we are “whole selves,” not work selves and home selves and it will help me know you and your team better if I know context. If something hard is going on with someone on your team, I’d love to know and be there to support you/them.

I would always take a lower valuation in order to work with a board member or VC partner I really like, rather than a higher valuation and a lesser board member.

I use the metaphor that a startup is like throwing yourself off a cliff and assembling an airplane on the way down. In other words, the default is that you’re dead.

The trick to being effective at this is that you have to get really good at saying no and just not doing things. There are a lot of things that are urgent but not important. The hard part of being a good CEO is that you have to be willing to let some things fall apart. You don’t have enough time to do everything well. And in practice, what that means is that there are some urgent things that you just don’t do. Getting comfortable with that takes a long time. It’s hard.

What I’ve found is that the ability to scale is complicated if you are both growing fast and developing the business through different verticals.

The way that I think about scaling is: What are the core activities? For example, if I’m acquiring one customer base, then hopefully I’ve got an acquisition team that is able to scale and do one thing repetitively over and over again. The functional team becomes more and more experienced, which really helps with scaling. And if you’re doing that, and it’s not differential across all these businesses, then you’ve got a better scaling model, right?

Reporting chains are ultimately about decision-making.