Steve Blank has an interesting post up about how a few small changes in culture at a startup - all done for accounting reasons - led to a lot of people leaving. This jibes with something I've thought for a long time: the hardest point in any company's lifecycle is the changeover from small, with ad-hoc management - to medium sized with formal processes.

A lot of the people you start with love the ad-hoc nature of a small firm, and the informality that surrounds it. Inevitably, when the company gets bigger, process takes over - you simply can't run an organization of, say, 200 people, the same way you ran it when it had 50. What's essential, I think, is simple awareness of that fact. Lots of small firms bring in "professional management" at that point, and alienate the core team (I saw this up close at ParcPlace years ago). I remain amazed that we see this story played out over and over again, given how obvious it all is...

Hat Tip Rob Fahrni