Archive for May, 2010

Growing big or staying small?

I have some entrepreneuring friends who have been successful with their ventures. With healthy cash flow and promising business models, they asked for my opinions on what’s next.

For some people reinvesting for growth is a clear choice but for young entrepreneur like my friends, it’s not always the best choice.

As you expand, you will become more and more CEO-ish. I mean, yes, you are a CEO before, but in a small company, you probably do a lot of the job yourself. You can afford to have finger in every pie. As you grow bigger, there is a rational bound that keeps you to more important tasks, which are usually managerial tasks. You spend less time doing the real job, which is most probably your passion.

The bigger your company is, less personal it would be. This is good or bad depends on how you see it. In a small company, keeping in touch with everyone is easy. A meeting might hold the whole work force. You see their face everyday. Decision making doesn’t take much time as there aren’t a lot of levels in command. This is not the case in big company. You will rely on senior officers to give you  inputs on different departments. You probably won’t even see other employees’ faces.

With more people in a company, you will face a lot of influence, either bad or good, especially from seniors who are probably older than you.  It will be more difficult to make decision, introduce something new, venture into a new business model or having fun in the office. You have to act serious to gain their respect. There will be politics too so you have to know when people are trying to win over you just to get you on their side, for example.

Of course, there are a lot of good reason to grow large. And some of the companies manage to keep the fun in the workplace, (i.e. Google, Facebook). What I mention above are just some points that some might overlook in the excitement of growing his/her company.

As for my friends cases, I actually advised them to grow their business, but also to be careful not to lose the reasons of why they started a company.

As for me, while I have had the opportunity to run a business cycle, make difficult and risky decision, make real profit, lose real money and some other things, I haven’t had the opportunity to run my own company yet as I feel there are still a lot to learn by working in other companies. Some might think that experiencing failures first hand is a good teacher. I think that’s true but if you don’t learn anything from it, it might be as well an excuse for such failure.