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, written by Jeremy. Read the commentary.

A few days ago I shared supper with the CEO and one of the executives of a small company here in town.

The executive asked me to join them and discuss their company’s strategy — they’re navigating through a growth phase and he believed my insights would help.

Turns out the CEO was fairly sceptical about anything I might suggest, so I spent a lot of the 2.5 hour meeting just listening.

There’s something tremendously freeing about entering an important conversation and sitting back to let it roll on around me. To sit silent through those situations where I feel pressure to speak up, make a mark, or prove my value. For one thing, I learn a lot more.

I learned about three stages of entrepreneurial growth. No one laid it out so distinctly but they seemed to spring out of the conversation on their own.

Stage 1:

– worried about cash flow
– single, dynamic leader
– driven by personal ambition and instinct
– cut corners, bootstrap like madmen
– work on spec regularly
– everything’s an experiment

Stage 2:

– cash flow a minor issue
– core of reasonably talented, self-motivated people is developing
– entrepreneur has become manager, accountant, supervisor, and leader
– instinct slowly replaced by rationality
– vision threatens to be overwhelmed by managing daily challenges
– experimentation replaced by reapplication of core competencies
– brand awareness starts to self-generate business
– main focus on quality rather than innovation

Stage 3:

– rationality prevails
– decisions threatened by rules-based automation
– hardly anything is experimental; experiments are threatening
– vision replaced by mission
– brand threatens to become irrelevant, commoditized, or diluted
– begin considering rebranding or augmenting core competencies
– entrepreneur is seeking new ventures and uses company as a stable
– competing completely on cost, quality and positioning instead of innovation

None of these stages are bad or good. All are necessary for a growing company.

The important thing to note is that most entrepreneurs don’t have all the skills to weather each of the stages. At one point or another, each entrepreneur will have to let someone else’s skills and insights weight their decisions.
I love doing this stuff!

Commentary

[…] recently read a great blog entry on this topic on Siftstar.com.  The blogger laid out the stages of growth of a startup venture […]