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  • Writer's pictureTeam ASL

Steps to move from a startup to a full fledged company

"There is a point when you go from an entrepreneurial fly - by - the - seat - of - your - pants startup to a professional organization that needs all the structure and bureaucracy that goes with it,"

- Michael Barnett, professor of management at Rutgers Business School

I came across an interesting article from the Wall Street Journal about Uber and the turmoil it is currently in. As a startup with big ambitions (just like many of us), they grew fast and quick, but somewhere along the way, things went wrong. Below are 3 takeaways I got from the article.

1. Financial visibility is something you should never lose sight of

Tech startups are known to make huge amounts of losses in its inception, while waiting for a buyout . However, Uber's losses were more prominent than other tech giants, as show in a figure from the article.

What went wrong?

"Uber operates in more than 70 countries with around 12,000 employees and 1.5 million contract drivers, yet it has no chief financial officer."

With a company that size and no one to consult regarding budgeting, costing, performances (etc.) matters, it would be extremely tough to keep a handle on the financial performance of the company and how to best utilise the capital raised. Keeping a handle on your financials would be key to ensuring financial health of your company.

2. Creating strong business processes from the inception of your company can take you further than you know

Companies always want to do what they are best at, and unfortunately accounting or formulating processes are never top of that list. We want to develop the next big thing in the market, and often lose sight of how a company should really operate.

'Mr Kalanick has insisted on running Uber like a scrappy startup even though it is now a global company whose private valuation exceeds those of companies such as Ford Motor Co"

Somewhere along the startup journey, you have to recognise that your baby is no longer in its cradle anymore, and controls and processes need to be set up to ensure no harm comes to it. Uber suffered with the lack of that, with instances such as having to withdraw their self driving cars on the streets of San Francisco, obtain proper permits, before putting them out on the streets again. The time and costs in an event like that could have been avoided.

3. Foster a company culture that will attract the right people to join your company, and in so increase business performance

There is no one size fits all culture for a company. Google's culture may appeal to a certain demographic of people with its free food and nap pods, but not everyone wants that.

A Kalanick hallmark has been night jam sessions—“seshes,” in Uber parlance—that could last until 2 a.m. The CEO sometimes summoned employees with little warning, causing them to delay other projects and scramble to prepare for session topics such as how to capitalize on Uber’s size. A topic might be debated each night for a week..... Mr. Kalanick played teams against each other, sometimes sowing resentment. Those elements went beyond fostering competitiveness, said some of the current and former employees, leading to disorganization and infighting.."

Startups work hard to create a culture unique from large MNCs. However, as the company's leader, one must continually assess and monitor via feedback channels and other metrics to know when the culture fostered has become counter productive.


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