by Laura Smith, Chief People Officer at Trade Ledger
For people who are driven, ambitious, and perhaps a bit idealistic, working at a startup is the holy grail. You get to change the world, build an outstanding CV, and have fun along the way. Like sipping your own company-branded beer, or hosting bake-alongs with your colleagues.
What's not to love, right? Except startup life isn't all fun and games. As much as it's fulfilling, it's also incredibly challenging.
In this post, I want to bust some common myths about what startup life is really like. I'll also share my thoughts on how startups can create an environment where employees can flourish.
Researchers Neil C. Churchill and Virginia L. Lewis have suggested that businesses go through five stages of development:
In the first two stages, the ultimate goal is to stay afloat. The business may have few or no customers, struggle to cover overhead, and even to develop a commercially viable product — poor market fit is the top reason startups fail. Some people thrive in such a fast-moving, constantly changing environment. And they enjoy building, improving, and evolving the business' processes. But, that's not right for everyone. It can also be hard to keep up.
There's pressure, long hours, and tight deadlines. And, as the organisational hierarchy is typically flat and there are few formal structures in place, job roles can be fluid. Which means staff have to get used to being proactive and wearing many hats.
Startups in stages three through to five are equally challenging places to work. They're now on more solid financial ground and have better-defined hierarchies, systems, and processes. However, to paraphrase business coach Khalid Halim, at this phase humans and businesses are growing at different rates. A human's growth is biological and linear, and it's not possible to speed it up. "A year from now," says Halim "you will be a year older — there's no growth hacking we can do to make that happen faster."
In comparison, when businesses catch on, they can grow exponentially — a process known in the startup world as 'hypergrowth'. When this happens, even the smartest, most talented people find it challenging to keep up the pace, and with good reason. As The Pioneers' Partner Bee Heller puts it, hypergrowth can be "like having 37 babies at once." So, what can we do to create the right environment for people to thrive?
In Outliers: The Story of Success, Malcolm Gladwell suggests that highly successful people excel at what they do because they've practiced for at least 10,000 hours.
Bill Gates, for instance, spent most of his teens in a computer lab writing programs in BASIC. Similarly, Gladwell argues, The Beatles' turning point was their three-and-a-half month residency at the Indra Club and the Kaiserkeller in Hamburg, where they played several sets a day.
There's no time for this when you work at a startup. You can expect to find yourself involved in or even overseeing critical projects in your first few months.
Leaving aside the learning curve, this can also take a mental toll. Impostor syndrome — doubting your talents, abilities, and fitness for the job — can be common in startups. In a 2018 study, 58% of tech workers said they felt like impostors. And the results cut across age groups and experience levels.
Of course, most of the time, this isn't the case at all. You do have the skills to excel. But it's important to have the right support. Finding a mentor, investing in coaching, and building psychological safety will help you grow more confident in your abilities. Which in turn will allow you to reach your potential.
A steep learning curve, big responsibilities, and pressure come with the territory when working at a startup. So it's important to make sure employees' personal goals align with the business' goals from the start. Churchill and Lewis put it this way: "...[staff] must recognise and be reconciled to the heavy... time-energy demands of the new business."
Similarly, in scaleups, staff have to be committed to the efforts required for growth.
At Trade Ledger, we've been proactive about this, fine-tuning our talent acquisition processes to make sure we're hiring people that are a good fit for our environment.
Talent acquisition works both ways. An effective process is also an opportunity for candidates to decide whether you're right for them. Culture assessments, value-based interviews, and employee value propositions (EVPs) are all tools you can use to help share your story in the market. And this will give you the best chance of making a perfect match.
In short, it’s about creating a structure that is aligned with your culture and environment. Getting this right enables you to grow effectively, be agile, and put the right people in the right places to meet your goals.
This doesn't mean things won't go wrong. But laying the foundation — and doing so early — gives you a better chance of getting it right in the longer term. As investor and HR expert Wendy van Lerschot puts it:
"Over the years, we have found that organisations start paying attention to these basics [a solid recruitment strategy and onboarding] only when some alarm bell goes off. That’s a bit like deciding to paint your house only once the paint has started peeling and wood rot has started setting in. [...] making the right start with a well-thought-through and flexible strategy will make it easier to take your recruitment to the next level when the organisation gets to that level."
If the recruitment process is the first step towards ensuring staff can handle startup life, encouraging a culture of feedback is the single most important thing you can do for everyone to feel supported along their journey.
At Trade Ledger, we've embodied this in our ‘Win together’ value. When people are learning so quickly — and doing something over and over until it's second nature isn't an option — we need to learn to trust one another and build a strong internal support network.
Honest, frank, constructive feedback helps people learn, develop and move along with you. By contrast, without any feedback, people can veer off into all sorts of directions that may not be right for the business.
With this in mind, it's important to remember that feedback is a two-way street. A healthy feedback loop isn't just about facilitating learning and ensuring things move in the right direction. It also helps drive culture: how decisions are made, whether people feel empowered, and also whether there's trust in the organisation.
Of course, encouraging feedback and communication only gets you so far. Processes are just processes. The real power lies in the conversation.
This is where strong leadership comes in. Good leaders set the itinerary, the direction, and the destination. They define what success looks like, guide staff through the tunnel, and fire them up to believe there's light at the end of it even when that light hasn't switched on yet.
At the same time, it's also important to make sure individuals have the right support along the way.
At Trade Ledger, we're moving towards two development meetings: one at the end of the year and one mid-year. Because things move so fast, we also have one-to-ones at least once a month to check in with staff on their development plans and see how they're doing.
These processes help create an environment in which we can support staff along the way. To borrow an analogy, rather than dropping staff at the deep end and seeing if they sink or swim, there's a raft they can hold on to as they learn.
In order to ensure everyone gets the best out of these processes, we also conduct people training for managers. This way, they can learn how to facilitate the conversation and ensure it's fruitful for everyone.
If you have the right personality and attitude, working at a startup can be immensely rewarding.
You'll do things you didn't think you were capable of and learn invaluable skills. Plus, working at a startup is a great place to be. You get to hang out and have fun with like-minded colleagues, celebrate weekly wins, and receive lot’s of perks along the way (who doesn't like those, right?)
The flipside is that it can be chaotic at times.
As Churchill and Lewis note, early-stage organisations have simple structures. The founder or founders do most of the business-critical tasks, and can easily manage a small team. But culture happens whether you tend to it or not. As startups grow, there's a real risk of bad habits taking root, creating an environment that's bad for staff and, ultimately, bad for the business' long-term success.
With that in mind, it's important to look ahead and be proactive. People are your company's most valuable asset. By offering strong leadership and strategically shaping, defining, and nurturing your culture into what you want it to be, you can create an environment where they can thrive.
At Trade Ledger, we're building the first open banking platform that lets lenders assess commercial credit risk in real time.
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