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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Small to Medium to Big

Comments (9)

I was at a board meeting on Friday for a company that is doing great and growing quickly.  This will be their second year of revenue and – for a software company – it’s far ahead of its peers for being in its second year of having products in the market.  I’m really impressed with and proud of what the founders and leadership team have built to date – and they are good at being introspective about what is working vs. what is not working.

One of the board members – who is also an entrepreneur – made the observation that we’ve built an “excellent small business.”  The challenge now – especially as we look at some of the things we are uncomfortable with – is making the transition to an “excellent medium sized business.”  While a few companies blast through this barrier, the vast majority of the ones that I’ve been involved with or observed that have made this transition have struggled to get there as they were faced with numerous challenges, including many that were new to the leadership team – either due to experience or to the growth vector they were on.

I’m currently involved in a few companies that are excellent small businesses that are now in their transition to a medium sized company.  I’ve experienced this a lot over the last decade and have plenty of views on it – both around what succeeds and what fails.  One of the neat things about being on my side of the table (e.g. the investor) is having lots of data points – time to put that to work again.

  • http://w-uh.com Ole Eichhorn

    It would be interesting to get your take on the differences between a small sized business and a medium sized business.

    My own view is that a business becomes medium sized when you don’t know what everything is working on anymore. At which point you need process – for communicating what needs to be done, and for getting feedback.

  • http://www.feld.com Brad Feld

    “Small” in my definition here is a company with

  • http://onstartups.com Dharmesh Shah

    I’d be interested in learning what benchmarks you use or what patterns you look for to determine which company is now a successful medium-sized businesss? Is this based on certain revenue/profit goals? Size of the team? Market-share? Age?

    Thanks.

  • sigma

    Maybe there are a few people who, via experience, perception, etc. have found the magic secrets of business management to permit a company to grow from small to medium to large and extra large — and fries with that?

    However there have been some companies that went from initial founding to large companies with the same small founding team leading all the way. Anyone heard of Microsoft, Google, YouTube, Apple, Intel, Oracle, FedEx?

    For the founders of these companies, what great management secrets, experience, acumen did they have? Is it in the famous books on business management, taught in MBA programs?

    Or, outrageous thought: A good business plus hard work, determination, and no really dumb mistakes are commonly enough.

    However, if anyone has any terrific secrets, then by all means they should write up these secrets and submit them to an appropriate peer-reviewed journal of original research. The business research community will be thrilled finally to have some solid information on the secrets!

  • http://www.youdesignit.com Blake P

    I feel like we are on the bubble and aren’t real sure that we want to make the transition. We are having a tough time deciding if bigger is better.

  • http://fl.vox.com/ Farhan Lalji

    Having worked in lot of organisations that have tried to make the move from small to medium and doing an executive MBA with courses in entrepreneurship, I believe that the successful growth companies are the ones that have owners/founders/leaders who can adapt. The ones who may have had a great sense of loyalty but can adapt to the changing needs from executives when the business is growing. The ones who switch from focusing on the detail to having more of a broad objective perspective. Its really difficult to adapt, but if people can adapt the company should be able to do so as well. Challenging but fun, enjoy the ride!

  • http://www.mnl.com Tom Brickley

    Our business model actually prevents us from growing too big as a single company. Our plan is to spin off successful products to seasoned management teams but retaining a percentage of the ownership and a seat on the board. Our philosophy is we are not the right people to grow a company exponentially and that our talents are best served remaining the incubator of products and services. We have a deep paranoia inbred in all of us regarding the cultures that must exist in the larger structures. I have no desire to deal with HR, finance, and several layers of management and all the crap associated with these ever! If we do this right we become a mini KKR or the like. I believe our strength will be our understanding of who we are and who we are not.

  • http://www.condomman.com/articles/condom-use/advantages-of-buying-condoms-online/ cheap condoms

    i would like to know the differences between small and big.
    because We are having a tough time deciding if bigger is better.

  • http://www.condomman.com/articles/condom-use/advantages-of-buying-condoms-online/ cheap condoms

    A good business plus hard work, determination, and no really dumb mistakes are commonly enough.

    However, if anyone has any terrific secrets, then by all means they should write up these secrets and submit them to an appropriate peer-reviewed journal of original research.

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