Scaling Challenges: Key Points of Collapse
Over the years, as 47 Degrees grew from a four-person room to a 115-person organization, we experienced several moments I like to call "Points of Collapse."
As the company expanded, we faced structural challenges that, if left unaddressed, could have led to serious breakdowns—what I call ‘Points of Collapse.’ These moments were critical turning points at which we had to adapt to survive and thrive.
Let me walk you through some of these points I’ve clearly identified, along with the approximate number of people we had when we encountered them.
1. Everyone Does Everything
This one mainly involves the founders. In the beginning, we were super motivated, with no time to think—just committing. We were partying hard and working harder, and things were just fine.
But when you start hiring more people than you can fit in a room (or feed with two large pizzas), you need areas of ownership.
We faced growth challenges because we were opinionated and found it difficult to delegate. So, each co-founder took on specific ownership areas to ensure accountability and personal growth. We divided responsibilities into four key areas: Sales, Operations, Engineering, and Marketing, based on what the business needed most and what best suited our individual strengths.
2. Smart People Need Clear Policies, Not Just Trust
We often quoted Steve Jobs: "We hire people smarter than us so we don't have to worry about what they do." But that’s only half the truth.
Smart people also need frameworks—both operational and career frameworks. Here’s an example:
Imagine you run a consulting company where many consultants travel frequently, but you don't have travel policies because you trust in people’s good faith and common sense.
Suddenly, you realize some people avoid expenses, not even buying a coffee, while others dine at fine restaurants and charge every expense. Who’s doing it wrong? The answer: neither. You are.
You need policies and frameworks to ensure fairness. Without them, unfairness takes root because common sense is subjective. What’s affordable to one person might be a luxury to another. That’s unfair.
We created clear travel expense policies and expanded this framework to include remote work guidelines and performance reviews. Implementing these frameworks was not easy however, these policies provided a foundation for consistent and fair decision-making.
3. Buying Toilet Paper in the Morning, Conducting Interviews in the Afternoon
Operationally, we’ve always been a bit of hackers. We were early adopters of many digital services—beta testers for Slack, Rippling, Mint, HiFive, you name it.
That made life easier for a while, but guess what? Operational issues are like water—they find their way to you.
We were hiring our first HR manager when we hit 80 people. Don’t see this as a good sign.
The lack of dedicated People and Culture professionals earlier caused operational inefficiencies. When hiring our People manager, we sought someone experienced in rapid growth and effective structures. This hire improved our talent management and streamlined operations.
4. We’re in a Boat, But Not Everyone Is Rowing in the Same Direction
Once you reach a certain number of people, it’s easy to get trapped by inertia, doing things the way they’ve always been done because... well, it works.
It’s also common to see a lack of strategy, with teams reacting instead of being proactive.
To avoid this, you need a purpose, clear communication, and a solid strategy. Easier said than done, right?
You need to implement a strategy framework where you regularly do a diagnosis (externally and internally), understand the market and goals, and cascade these down to the entire company to share the direction we all are rowing. We put such a framework in place at that point.
We adopted Hoshin Kanri to align all functions and levels (In this article I talked about this), ensuring we achieve our strategic objectives. Leadership conducted quarterly market analyses, set clear goals, and used an OKR (Objectives and Key Results) framework to keep teams aligned.
----
In summary, each ‘Point of Collapse’ taught us valuable lessons on delegation, establishing clear policies, and aligning the team toward a common purpose. These challenges prepared the company for its acquisition and future growth.
And that's it! I guess that I am missing zillions of things, but after crossing the 100-person mark, we were acquired by Xebia, where we’ve been navigating new challenges that come with being part of a 5,500+ organization. But that’s a story for another article.
What about you? Have you encountered any of these issues? I’d love to start a conversation on Twitter (I just can’t call it X) and learn about your experiences. 😊
