Earlier this year, Seattle-based DocuSign, which allows users to ink legally binding agreements over the Web, landed $10 million in venture financing from two Silicon Valley firms. It was a huge break for a 3-year-old company on the verge--but not necessarily for co-founder Court Lorenzini.
"Instead of being highly flexible, suddenly you need to create processes and stick to them," he says. "It's all about metrics and measurable objectives."
After starting three other software companies, Lorenzini knows what gets him up for work in the morning: creating new ventures, not making them grow to the sky. That's why in January he handed the reins to Matt Schiltz, a serial chief executive who most recently headed up General Software and before that Courtlink, an online court-records company. While Schiltz sweats the numbers, Lorenzini, now in charge of business development, can focus on more inspiring matters, like coming up with new products.
"Entrepreneurs have an extremely off-the-chart need for freedom and a very low acceptance of control," says Carl Robinson, a psychologist who works primarily with growing middle-market companies. "Many executives that you start off with are not going to be as effective when it gets to be a 200-person company."
Everyone knows that loving what you do and finding a good fit are the keys to success. But when it comes to tackling a serious growth strategy and all its attendant hassles, you have to ask yourself some hard questions, says executive psychologist Debra Condren, who has worked with big names like 3M, Chevron and Hewlett-Packard.
The most important one:
- Why go big at all?
- Are you looking to cash out in a sale?
- Enamored of the thought of having your own stock ticker?
- Simply suffused with competitive desire?
Whatever your reason, get a grip on it before you decide to kick growth into high gear.
Next, ask yourself if you are willing to make tough decisions for the growth of your company. If you have an intense loyalty to the small group who helped get things off the ground, understand that those folks may not be able to come along for the ride. If you're not comfortable supplanting (or firing) them, stay small. And even if you're not ready to do the cutting, your board may mandate it.
For entrepreneurs who prize their independence, ask yourselves how much of it you're willing to give up. As the demands mount, both your schedule and decisions become less your own; worse, you may have investors and board members to appease. "It becomes very hard for company founders to accept that they are no longer the real boss," says Robinson.
Like holding forth in public? You better, because companies of any significant size need a public face. Entrepreneurs who thrive on public performances--weekly meetings, shareholder gripe sessions, even television interviews--have an easier time than those who shun the spotlight.
"You need to have the ability to fill a room and inspire people," says Condren. (If public speaking isn't your forte but you still are hankering to grow, find a confident substitute who can sell your story.)
Not only do you have to be able to communicate, you need a knack for building consensus. In most cases, the bigger your business, the more input you need from those around you--and that means being willing and able to marshal them to your cause. Have a my-way-or-the-highway mentality? Can your growth plans.
At bottom, planning for growth is as much about knowing who you are as it is about knowing how to nab new customers or manage inventory. Lorenzini, for one, is happy not to be at the helm of a large public company. "As a young manager, I would've put that on the top of my list of aspirations," he says. Today, though, Lorenzini is all about keeping those creative juices flowing: "When I'm brutally honest with myself, [that's] what I enjoy."