One saying we have around our office is that what got you here won’t necessarily get you there. What this is in recognition of is that projects, businesses, and people are all works in progress. In other words, what you did to get where you are today may not scale and, in fact, may be working against you with regards to getting where you want to go next. 

For example, after years of thinking about it, we finally (now that we have a qualified CFO) implemented Expensify in our own office to better track, reimburse, and manage expenses that employees were incurring on behalf of Permanent Equity as well as promulgate an official expense reimbursement policy. Previously, this process was manual and we trusted the judgment of individual employees to decide what was an appropriate amount to spend on something. With 10 employees, that was fine. With 15, it started being a hassle. As we approached 20, it became a pain point.

Process and policies, of course, mean less flexibility, which might be irksome to some, but also enables faster scaling. The reason that’s so is because fast, decentralized decision-making relies on trust. Absent process and policies, the only way to build trust is through careful hiring and relationship building over long periods of time. And that’s one way to do it. But if you want to go faster, you need process and policy so that new folks can understand what success looks like and what is expected of them. But also everyone needs to abide by the same rules because having two (or more) classes of employees will never beget a strong culture.

Here’s another example: We saw another business that had scaled to high heights and promoted several long-tenured employees into leadership roles. Normally, this would be a massive success story and a desirable situation. The problem was that these employees were hired before the business had to document their immigration status and no one knew what that status was.

For a small, closely-held business that may remain an unasked question one can live with. But for a large business taking outside capital, it’s a non-negotiable. 

This isn’t to judge anything anyone has done to build their business. Decisions are always made in context and looking back, most that I’ve encountered have been defensible. But some decisions have half-lives and others get outgrown. That’s important to remember and revisit because scaling on top of a shaky foundation is a good way to sow the seeds of your own destruction.

— Tim Hanson

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