Oct 30 2006

Small to Medium to Big

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.