HACKER Q&A
📣 davehcker

Why do startups end up becoming 'corporate-like'


I have always been fascinated by the idea of (tech) startups. I always felt that startups are not just some other apples, but are a different fruit altogether. And one of the primary attractions in them is the culture- a bit informal, and yet hyper-productive; personal, and yet respectful; transparent and quite flat and approachable.

I get the point that if the startup goes on to expand like crazy and new people keep coming in (and leaving), there would emerge things like hierarchy, pointy-haired bosses, management and HR and what not.

What I don't get it is that why would startups with <10-15 employees and over years in operation would want to behave like a BIG company. I have encountered startups where there would be management, useless meeting, artificial hierarchy, etc. when there seems to be no such need. To satisfy my curiosity, I'd ask the 'individuals' of the startup individually, and none would seem to like it or knows why 'they' are doing it, and yet they do it. Why does it happen then? Do startups feel good by mimicking big corporation cultures?

  👤 op03 Accepted Answer ✓
Because people discover their own limitations sooner or later.

They don't have the time, they don't have enough skill, the problem is something they haven't dealt with before etc etc.

Once you get to that stage, the door opens automatically and corporate robots and corporate culture enter the story.

Stick this on a fridge - No one really wants to deal with shit forever. Especially after it hits the fan again and again and again.

After you learn that you can hire someone else to do it then there is no turning back.

Oh thats the 3rd employee having some psychological issue above my pay grade to deal with, well time to a hire a HR person for baby sitting duties. Oh the product team is doing a great job but not generating any revenue but you like them all and don't know how to tell them to work on shit, time to hire someone else who has no problem doing it. Oh these sales deals need someone to pander and sit the whole day outside the offices of douchebags well time to hire a "proper" sales team. Ooh man we paid the govt 200K extra in taxes cause we didnt know about clause 18 on page 4300, time to hire a "serious" accountant from a slightly larger firm to keep the books, who will then tell you things need to get more corporate around here or he will quit. And you sigh and say okay Bob you win.

👤 codingdave
I've seen the non-corporate culture last, so it is not guaranteed that small companies will go this route. So I suspect it is simply a lack of management expertise. As a company grows, even a small one, they hit pain points. If they don't know how to resolve those pains, they seek help. And most of the management help you'll find is how to manage large companies, so that is what they hear, and that is what they follow.
👤 smt88
> culture- a bit informal, and yet hyper-productive; personal, and yet respectful; transparent and quite flat and approachable

This is a very rosy view of startup culture. I've rarely encountered a culture like this in 20 years of building and consulting for startups.

In fact, startups are often the least transparent organizations because they have no legal obligation to publish financial information.

> What I don't get it is that why would startups with <10-15 employees and over years in operation would want to behave like a BIG company. I have encountered startups where there would be management, useless meeting, artificial hierarchy, etc.

This happens for lots of reasons. Here are a few:

(0. Many of these things -- management, meetings, hierarchies -- are not categorically useless. They're tools that can be misused.)

1. People with big-company backgrounds join the team and reproduce what they find familiar.

2. Structure, predictability, and repeatability become increasingly important as a startup scales. People address this by defining processes, which may be inefficient (or may not -- it depends on how good the managers are).

3. When managers don't know how to solve a problem, they look at how other companies solved it. Sometimes they get it wrong. Agile is a great example: at one point, it helped a few companies, and then everyone adopted it without understanding how/why to adapt it to their own purposes. This resulted in lots of waste and a backlash against Agile.

4. Investors sometimes become armchair managers and will push startup leadership to build these processes.

5. Employees demand them. A lot of people do not enjoy flat hierarchies, 100% autonomous (meeting-less) work, or having no title. Titles in particular can be as valuable to people as a big raise in salary.