The undervalued advantages of being a small startup

April 15, 2013starting up

I remember when I was 12, I was desperate to grow up. I think most of us are when we’re young. Similarly, when you’re getting your startup off the ground, it can be easy to wish ourselves ahead to having a big team, a fully-fledged product and millions of users.

The thing is, there are a lot of cool things to experience, enjoy and be happy about when you are 12, before you become 13, 14, 15. The same applies when you’re a 2 person or 3 person startup. There are plenty of reasons to be happy.

You can move fast when you are small

I think one of the interesting things I’ve learned while growing Buffer to 11 people is that you can move fast when you’re 11 people, however you can also move rather fast when you’re just 2 people.

This is not to say that we moved faster overall when we were 2 people. We now have a larger footprint: we have a super useful web product, mobile apps for iPhone, Android and Blackberry, browser extensions for Chrome, Safari and Firefox as well as countless integrations with awesome partner apps and startups. There is no way we could move fast in all of these various areas if we were just 2 people.

However, the key thing is that you can move just as fast in terms of percentage growth when you are 2 people as when you are 11. In fact, in our early days we sustained 40% MoM growth for almost the whole of the first year.

Just focus on the right things and crank away at code and marketing and you can make a lot happen as just a couple of founders. That brings me to my next point:

You don’t need structure when you’re small

A couple of months ago I had a very interesting week where I spoke separately with both Jonathan Abrams and our advisor Maneesh Arora and found that they both had similar advice, and shared that they were staying small for as long as they could with their startups. These are two very experienced founders, and they were sharing that they had no hurry to grow big. I even remember Maneesh advising us to pay ourselves more instead of spending the cash on new hires. It now makes a lot of sense to me.

I’ve found that there is are a series of tipping points in a startup where prior to that point, structure would slow you down, and after the fact structure will speed you up.

For example:

1. When you’re just 2 founders you can make all the decisions collaboratively, with no real structure.
2. When you become 3 people, it probably still works.
3. When you’re 5, 6 or 7 then it starts to break down and slow you down.

Put differently:

"Adding just two more people to a team of 3 means that there will be 10 possible combinations of 1:1 conversations. Make it 10 people and you have a whopping 45 possible sets of conversation partners." - Duane Jackson

That’s when you need to introduce structure and select one person to make the final call and lead the process. We’ve found this repeatedly, with product and with our customer support team and our engineering team too. We recently added more structure by promoting Sunil to CTO, leading engineering, and Carolyn to CHO, leading customer support.

My lesson learned here is that it is important to get the timing right with staying unstructured, or introducing structure. If you have departments and titles when you’re just a couple of people, that will probably slow you down. If you have a team of 30 people and no one in charge, that’s probably going to be slow too.

You can learn more easily from your users when you are small

When you are just getting started, it is vital to be in touch with the user and to do good customer development in order to understand whether your assumptions are correct.

The beauty is that when you are small it is actually very easy to have a conversation with your users, because there aren’t many of them! The harder part is actually taking the plunge and asking for that Skype call or coffee meeting with someone who signed up for your product.

I think Eric Ries put it very well in one of his presentations:

Most of the techniques that big companies use to do customer research (surveys, in depth analysis, data mining) they do because they have too many users to keep track of, and therefore they have to do that stuff to try to make sense of all the information they have. When you’re small you have the advantage that you only have a small group of people to get to know.

Indeed, we found that when we tried to do A/B testing and build out detailed metrics in our first few months, we were much better off to simply reach out and talk with the people who were signing up to Buffer.

Now that we have over 600,000 users posting more than a million times a week, what Eric Ries said resonates even more. We now have a small team working just on metrics and understanding what our users are doing. You can avoid this when you’re small, it is a lot of fun to be able to glean so much from just a few conversations.

Photo credit: Christian