How to Manage a Startup Team: Comprehensive Guide [2023]

When starting to build a company, one must formulate a board strategy ASAP. If we are talking about a classic company, traditional methods that have proven effective for many other enterprises will do, but, if you are running a startup, then you will need to devise a personalized approach.

First, I want to say that you and your co-founders should be able to build and scale the company without needing outside expertise. In other words, your co-founding team must provide the skills required to grow your company from zero to $100,000 in revenue. For a mobile application, the list includes front-end, back-end, UX, growth, marketing, and operations, but it may look different for another project type. If certain skills are critical to your company’s growth, they should not be hired, and should be provided by the co-founders instead as one typically cannot hire the best talent at an early stage without spending a fortune on salaries. If you need a game-changing team for little money, the only way to attract the best cadres is to invite them to become your co-founders. You want people with a variety of useful skills, so that they can cover the company’s needs with the smallest team possible instead of starting out with 5 co-founders or more. This is especially crucial for a startup, since they do not typically start out with a large budget.

My next point would be to scale your team to 3~10 specialists, each with their own area of expertise. These people should be easily trainable and ready to perform tasks other than those they were hired for. Your working relationships with them will define the company more than you can imagine. One possible approach is to use the Myers-Briggs test as part of the application process. This would make it possible to understand a potential employee’s personality type and determine if they would get along with the rest of the crew. Pay special attention to their compatibility with direct teammates and immediate supervisor. For example, you can hire 1 developer, 2 customer/support specialists, 2 marketing specialists, 1 office manager, and a head of sales who might eventually become the chief revenue officer.

One big mistake you should avoid is the assumption that these early employees want or are entitled to lead their teams as the company grew. Corporate seniority does not equate to having the necessary management skills. You might have a senior developer who just wants to code without worrying about team management, and that is perfectly fine. Please do not assume that being promoted to a managing role is what everyone wants or needs or that is indeed what is best for your business. There may be people on your team who just want to do their job well without taking on the reigns of management.

When you are a small team, especially a tiny startup, you can get away with many things that seem “normal” in the context of that company: for example, many team members can bring and use their personal laptops at work. As the company grows, you will see dramatic changes to the team’s structure as well as how formal you have to be about this sort of thing. You will eventually realize that a pleasant, friendly environment will not be enough to achieve results. The biggest surprise at this stage of development might come in the form of realization that doubling a team’s size does not double its productivity. Increasing the number of engineers from 2 to 6 and the marketing experts from 2 to 5 during scaling may not raise these teams’ productivity, at least not in direct proportion to the number of new employees you now need to train and accommodate. At this point, you will have to consider HR management, task delegation, coordination, and inter-team communication, all of which takes time. On the plus side, hiring will become easier since you will be looking for people with specific skill sets to fill very particular roles.

These will be specialized people with exact functions, which also means that the new staff will not be involved in everything the company does. When there are only 10 of you, everyone basically knows and plays a part in every process, working in sync. When you have 20 people, you start to delegate people to particular tasks, looking for absolute killers in that one type of work, which also means that they probably will not care about other teams’ demands specifics. At this point, you begin to build an internal hierarchy.

You will now have to worry about many things that did not matter until this point. For example, you will need to be able to standardize salaries so that team members in comparable positions and with similar experience receive equal pay. You might even stop hiring more experienced team members for non-managing roles as there will be instances where new employees will have a higher expected salary than the person they would be reporting to, which means having to adjust both salaries to ensure fair compensation between the manager and the new hires.

There may appear various project leads in your organization who do not have people reporting to them directly, but who will be acting as another manager’s right hand, helping to coordinate and delegate functions within their respective teams or taking on some important jobs themselves. Certain groups may be small, consisting of about 2–3 people, but a manager is defined by the ability to own and track essential performance indicators that are key to their company. Their job is to assign tasks, see them through to the end, and manage the team, which can be easier said than done. There is a human side to having someone accountable to you: understanding what motivates them, caring about what is going on in their lives, knowing how to keep them motivated, and, of course, how much to pay them for their efforts!

It is not a job for anyone, especially not for the faint of heart. Now let us talk about the role of the director. It should be said that there may be several of them in a given company. Directors govern certain team branches and may have one or more managers reporting directly to them. The defining characteristic here is their ability to hold large teams in check, their deep understanding of all the tasks their teams perform, and their ability to make decisions based on various metrics. Directors can also greatly influence the direction the company is headed: they have a say in choice-making as the founders usually have a lot of respect for their opinion, though nothing is perpetual, of course. Only co-founders hold higher esteem than directors.

Thus, leading a startup is a rather complicated process. The main problem is that, initially, it is going to be a small project where all team members enjoy similar rights. Gradually, as the company grows, you will need to take on more employees, which will inevitably make managing it more challenging. It is necessary to have a precise strategy going forward so that all employees are properly motivated and satisfied, contributing towards increased productivity.

by DATA40