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June 02. 2013 4:16PM

Ask the Expert: Transitioning from a large company to a start-up


 

Making the transition from running a large company to a start-up can be overwhelming, but it doesn't have to be. These are what I see to be the key factors of running a company and how they differ from a large organization to a start-up.

Skills

Skills are a huge determinant in the success of a start-up and a large company alike; not only the skills of the executive team, but the skills of each employee are vital. When transitioning from running a large company to a small start-up there are certain skills that will transfer seamlessly, and skills that you will need to develop.


 

The two positions can be similar, while vastly different at the same time. If you have only had experience with large companies, be prepared for a rude awakening. There are no secretaries, no assistants, oftentimes there aren't people there to root you on. An entrepreneur who wants to launch a start-up needs to be self-reliant and self-confident. They need to be able to adapt and move quickly in changing environments, particularly in the tech industry.

Having experience with a large company can also be hugely beneficial when managing a start-up. There is already a road map of success imprinted in the brain. This aids in knowing when to hire that next person, when to pivot if need be, and is a guiding light on whether the right path is being taken.

Along with skills of the entrepreneur, skills of the talent the entrepreneur hires are critical. In a start-up environment, the first 20 to 50 people you hire create your company culture, the next 50 to 100 continue to build it, and after that it becomes extraordinarily difficult to change.

The initial hires at a start-up need to be able to laser focus on the core area of your company; a tech start-up needs strong tech talent, for instance. The initial team also needs to be nimble and agile; they need to have a solid set of common skills. Start-up life isn't easy; the hours are long, the work is hard, but it has huge potential for pay-off. You need people who will be right there with you, willing to put in what it takes, people you can count on to take you where you want to go.

Communication

Communication is one of the major differences in running a large company versus a start-up. Often times, communication breaks down in big organizations. Imagine playing the childhood game of "telephone." The end message always gets jumbled because it gets passed through so many people; I have seen it happen time and time again in established companies. The first-name basis gets eliminated for the executive team when there are thousands of employees, and it becomes harder to get a message across.

Alternatively, in the beginning stages of a start-up, communication can be easy if you keep it an open environment. Everyone knows everyone, everyone is working toward a common goal, and they know the outcome they want to reach. I highly recommend keeping the office open with no cubes. As the team grows and evolves, so does the communication. It has to be actively fine-tuned and adapted to avoid a breakdown. The pace is faster in a start-up, and the communication needs to follow suit.

Equity vs. higher salary

I am a strong believer that everyone should have equity in the company they work for. Everyone needs to benefit when the company is succeeding, not just upper management. It is a way a start-up can gain quality talent, by offsetting a lower salary in exchange for a stake in the company.

Equity distribution helps keep the passion alive in a start-up. By everyone having a "piece of the pie," it drives hard work: They know they have ownership in the success of the company. It makes those long hours worth it. A start-up can't afford to have someone who only works 9 to 5; it demands the passion to work the long hours in order to achieve the goal as a team. A Fortune 1000 company can easily lose the passion that a start-up has.

Ultimately, the success of a start-up lies within its core values. Find people who are passionate, keep communication open, use what you know from established companies as your road map, and keep your target in sight as you quickly and nimbly make your vision a reality.

I look forward to answering your questions and/or responding to your comments at www.unionleader.com/expert or abihub.org/ask-the-expert.

Robert Wilkins is an executive entrepreneur who consults for small to large companies with needs in the areas of growth strategy, organizational planning and visionary marketing. Before launching Ziftr and myVBO, he spent 11 years as executive vice president with PC Connection, a Fortune 1000 reseller of high-tech equipment. Prior to his employment with PC Connection, he founded two high-tech companies. Connect via social media: @ziftr and www.facebook.com/ziftr.


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