Fixed mindset vs. growth mindset in startups
One of the great things about seed startups is the bias towards a growth mindset. Since the founders started with a blank canvas, they have learned through their own startup success that you can build anything if you put your mind to it. This usually continues through the founding team and even through those first thirty to fifty employees after Series A.
But then…
I’ve written before about Dunbar’s number in startups, which I think is 50 people, because of the stress of growth, rather than the normal 150 in a stable tribe. As I advise in that piece, founders start a rapid learning curve around leadership and management when they hit Dunbar’s number. Usually they aren’t very good at managing it for a few years, which is unfortunately also the useful life time of the startup. So many founders stop trying to do hard things. One of the most difficult things to manage is rapid change. Your employees like consistency, and they don’t have nearly the amount of information you do, so your decisions to change things, which seem entirely rational to you, feel like the work of a complete maniac to your employees.
Unfortunately, a growth mindset implies change. Whatever you are doing today is not good enough, you have to reinvent yourself to survive and keep taking advantage of 10x bigger opportunities. Amazon is probably the ultimate growth mindset company as I wrote about here in my book review of Working Backwards. You can imagine what Amazon was like right after IPO when it was figuring this approach out, especially with products like AWS and Prime. I’ve seen growth mindset at later stages in several of my companies. Lambda School for example did a big pivot towards employer engagement when they realized that more handholding was necessary to scale up to millions of new CS students finding jobs every year. AppLovin, a company co-founded by my friend John Krystynak, started off as a mobile install ad network. At some point, their CEO Adam realized that they were determining success on the app store, and he began buying up games before charting them.
You can imagine the internal dynamics at these three companies. First, in all three cases, their original business idea was going very well. Second, none had veteran managers and the founders were neither professional managers or leaders. Third, these were significant bets requiring a huge amount of attention from founders and management, and changing a lot of what people on the team were doing day to day. I can tell you that the internal conversation many employees were having was not “Man, this AWS thing in genius, it’s going to 10x our company.” It was “What the heck is Bezos and crew up to again, they must have ADHD, yet another fire drill, how do we get them to take a vacation?”
Here is the thing. If you don’t 10x your company when the opportunities become clear to you, someone else will. If Amazon had not invented Prime and two-day shipping, it’s very likely someone else would and Amazon would be a much smaller company. If Lambda hadn’t focused on employers, someone else would be the largest CS educator in the world. So you have to do it, and everyone is going to gripe, but you have to do it anyway.
So, how do you continue your growth mindset no matter how large it grows? One easy and important step is to celebrate the successes — large and small, that have come from experimentation. Remember that in high growth, many of your employees are new and have no idea what the path was to your current success. So use language carefully around experimentation, innovation, growth, progress and use it consistently. Don’t fail to call out examples for your team when this has worked, even if you sound like a broken record. Then when you scale up the next 10x bet, use that language to support your thesis. It’s very boring, but this kind of consistency but adamant pursuit of 10x progress is what works.
And talk about failure. In my work with kids at Rocketship, I observed that students with fixed mindset usually have a greater fear of failure than those with a growth mindset. In companies, it makes a lot of sense as the 70th employee to not want to fail. This makes the default corporate culture one of fixed mindset and fear of failure. That’s why as a founder, you need to fight against that relentlessly. As Jeff Bezos said “I believe we are the best place in the world to fail.” When you say that as a founder and back it up by supporting the people who fail and celebrating the learning rather than the failure, it repositions your culture significantly, even if you are getting negative feedback along the way.
I can’t tell you how many times I was told to slow down, or be more consistent. What really happened though was that I was able to bring managers into the company over time who could communicate messages like the ones above because they had built deep trust with their teams. That allowed me to keep pushing for change and growth, while the team could have that filtered a bit by more reasonable people.
