Blank’s Why Startups Stumble, and Why CEO RhythmsForum Might Be the Cure

Karl R. LaPan, President and CEO of The NIIC

Steve Blank’s blog Why Successful Startups Stumble at 40+ Employees is an interesting and relevant read for those searching, building and scaling a company. While I suggest reading the entire article, it is worth restating Blank’s key four lessons learned for those who want the “cliff note” version.

Lessons Learned

  • Startups go from Search to Build to Scale
  • The Search to Build phase happens ~40 people
  • Very different management tools and techniques are needed to guide your company through this new phase
  • You need to reset your board and your peer advisers to people who know how to manage “building” a company versus “starting” one

While I think this stumbling happens much sooner than 40 people (makes sense for venture or angel backed) but in bootstrapped companies (more like 20 people in my experience), I do think his main insights and acknowledgment of the wrong advisors and lack of management tools available to support high-growth CEO’s is directly on point. A key observation he makes is regarding governance transitions affecting high-performance companies in “build” mode. He notes:

  • If you already had an advisory board (formal and/or informal), add some CEO’s who have been through this phase. If not, start one;
  • Get a one-one CEO coach or join a CEO peer group;
  • And potentially the most difficult, think about upgrading his board by transitioning out board members whose expertise was solely rooted in the Search stage

This acknowledgment of loneliness and isolation coupled with the lack of a “playbook” is exactly why the NIIC is supporting Todd Schrock’s CEO RhythmsForum, a new opportunity for those with the unique challenge of owning or running businesses of 20-100 employees. If you missed his blog entitled, “How to Overcome the Unique Challenges of Emerging Businesses, you can read it hereDon’t wait until you hit the high water mark before you proactively seek a smart CEO peer group powered by a capable trusted advisor who knows how to build companies. It is not too late to join CEO RhythmsForum. You will be glad you did.


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