Burn baby burn: startup inferno

PayPal’s original customer service team employed 3 people. When they started getting 10,000 angry complaint calls a month, they turned off the phones. This is what we call letting a fire burn. PayPal is where it is today because it prioritised growth over all else. How much faster could you grow if you got comfortable amongst the flames?

When building a startup with a growing team and scarce resources, you’re sometimes going to have to let fires burn.

The trouble is, it might not just be your house that’s on fire. It might be several rooms at once, each holding equally valuable possessions. 

All have the potential to burn you to the ground. You must learn to extinguish the fires that are burning the fastest, and let the others keep you warm while you do it. 

Firefighting equals inertia 

Constantly fighting fires means staying in one place. It means coming back to a previous point of safety once the fire is out. There can be no driving forward with the business when all you’re doing is reacting and correcting.

LinkedIn founder/original PayPal board member/VC/podcaster/billionaire Reid Hoffman speaks about this in his recently released book Masters of Scale (and the podcast devoted to this chapter). 

As Hoffman explains, “If you spend all your time fighting fires, you may miss critical opportunities to build your business. You’ll be all reaction and no action”.

Reprogramming your business brain 

Letting fires burn is foremost a matter of intelligent decision making, and secondmost a matter of temerity. 

It’s a game of holding nerve. It’s correcting a lifetime of programming that everything has to be immediately fixed and made immaculate. Humans are very uncomfortable with unresolved issues. But the most successful entrepreneurs make unresolved issues their home.  

Controlled burning 

Thankfully, Hoffman doesn’t just tell us to let fires burn. He offers some fire safety techniques to founders new to running early-stage companies:

Look for root causes (AKA finding leverage)

A solution that puts out a fire is good. A solution that puts out multiple fires is better.

Often in startups there is one glaring issue that is causing multiple issues. Hint: it’s usually a person.

Look for the “most important” fires 

Perhaps a phrase that conjures less hellish imagery is “pick your battles”. 

You might have to prioritise new customers (growth) over your existing customers. If your existing customers are a loyal band of stragglers who’ve been with you since day one, this is going to be painful. Hoffman speaks of the early PayPal days where the 3-person customer service team was receiving 10,000 complaints a month. Phones were ringing 24 hours a day. Their answer? Turn off the ringers.

PayPal focused on growing their user base exponentially until they had the resources to set up a 200-person call centre to care for their existing customers. It was a nail-biting fire to let burn in the face of real anger from real people, many of whom had businesses relying on PayPal’s financial services. 

Hoffman says, “​​I wouldn’t have solved it a moment sooner. Provide whatever service you can as long as it doesn’t slow us down – and that may mean no service.”

While we’re talking about prioritisation, it’s also important to beware of puritanical attitudes amongst your staff. A designer, web developer, or marketer that insists on doing things “their way” or by the book can be a drain on time or resources that might be more urgently needed elsewhere. 

Communicate across your team

Speaking as a guest on Hoffman’s Masters of Scale podcast, Selina Tobaccowala (serial founder whose startups include Evite, SurveyMonkey, and Ticketmaster) remarks that when things start to go wrong, “communication is the first thing to break down”.

Hoffman follows the point with the importance of showing your team that “yes, you see the problem, and yes, your neglect is deliberate”. As you grow, each department will have its priorities. At times you’ll deal with frustration, confusion, and even anger if there is no clear reason for your perceived neglect. 

Transparent communication is even more crucial in the remote work era, where it’s much easier for employees to avoid direct confrontation and to bury their heads in the sand. Creating an anti-blame environment is a good place to start. Employees afraid of the leadership team will be much slower to confess mistakes, feel much more paralyzed when trying to correct them, and be more afraid to speak up about ambitious ideas in the future. 

Can some fires burn forever?

Successful founders and company leaders know that singular, focused brand personalities  are most powerful in reaching target audiences. Unless you’re McDonalds, trying to be a jack of all trades simply doesn’t work. 

This means there are always going to be things you don’t do well. 

In Hoffman’s words, Amazon is “not going to win a Webby award anytime soon…. What Bezos knows is that what matters most to people is convenience, price and speed…. Bezos won’t allow anyone to vary from those three goals at all. Even if they say, ‘But you could do this’. ‘No, no, no. Convenience, price, speed.’”

Embracing Positive Stress 

Watching fires burn can feel painful, but it can also be a place of positive stress. 

Your role as founder is to project manage those fires until you have the budget, bug fixes, and painstakingly-selected personnel to work gradually towards smooth (fire-resistant!) operation.

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