Scaling a startup: Why you must focus on the ‘who’ as well as the ‘what’ - I by IMD
A growing number of founders are discovering that a product‑centric growth plan can stall before it ever takes off. While a compelling solution is still the engine of any new business, the people who build, sell, and support it have become the decisive factor in turning a fledgling venture into a sustainable company.
From Product‑First to People‑First
Early‑stage startups often rally around a single idea – a disruptive technology, a novel service, or a fresh market insight. The narrative is simple: solve a problem, attract users, raise capital. Yet, as companies move beyond the prototype stage, the complexity of scaling multiplies. Teams need to expand quickly, processes must be formalised, and culture becomes a competitive advantage or a liability.
Industry veterans now argue that the "who" – the talent, leadership style, and organisational design – should receive as much strategic attention as the "what" – the product roadmap. The shift does not diminish the importance of innovation; it merely recognises that execution at scale is a people problem.
Silicon Valley’s Talent‑Driven Turnaround
A well‑known cloud‑storage startup recently pivoted after a series of missed product milestones. The CEO hired a seasoned COO with a background in scaling engineering teams. Within six months, the company restructured its development workflow, introduced clear career ladders, and reduced employee turnover by 40 percent. The renewed focus on hiring the right engineers and managers allowed the product team to deliver a stable version that attracted a major enterprise client, unlocking a new revenue stream.
Nairobi’s Community‑Centred Model
In East Africa, a mobile‑payment platform grew from a university project to a regional leader by embedding local talent at every level. Instead of importing senior managers from abroad, the founders recruited experienced fintech professionals from neighboring markets. They also created mentorship programs that paired new hires with community leaders. This approach built trust with regulators and users, accelerating market adoption across three countries.
Berlin’s Remote‑First Experiment
A European e‑commerce startup experimented with a fully remote workforce early in its scaling phase. By prioritising clear communication norms, mental‑health benefits, and flexible work hours, the company retained a diverse talent pool across five time zones. The result was a 25 percent increase in order fulfilment speed and a measurable boost in customer satisfaction scores.
What Investors Are Saying
Venture capitalists are adjusting their due‑diligence checklists. Beyond product‑market fit, they now scrutinise leadership depth, hiring pipelines, and cultural alignment. One prominent fund manager noted, "We look for founders who understand that scaling is as much about building a resilient team as it is about perfecting the technology."
Data from a recent survey of 200 investors shows that 68 percent consider the quality of a startup's talent acquisition strategy a top‑three factor when deciding on follow‑on funding. The same survey revealed that startups with clear people‑first roadmaps raised, on average, 30 percent more capital in subsequent rounds.
Global Ripple Effects
The emphasis on the "who" is reshaping ecosystems worldwide. In emerging markets, where skilled labour pools are still developing, startups are partnering with universities and vocational schools to create pipelines of ready‑to‑work talent. In mature economies, firms are investing in reskilling programs to keep pace with rapid technological change.
This trend also influences policy. Governments are launching incentives for companies that demonstrate inclusive hiring practices and employee development programs. The goal is to boost economic growth by ensuring that the workforce can support the next wave of high‑growth businesses.
Looking Ahead: What It Means for Founders
For entrepreneurs, the lesson is clear: a product‑only focus can leave a company vulnerable to talent shortages, cultural missteps, and operational bottlenecks. Building a scaling strategy now means:
1. Mapping talent needs early – Identify critical roles for the next 12‑18 months and create hiring timelines. 2. Investing in culture – Define core values, communicate them consistently, and embed them in performance reviews. 3. Developing leadership depth – Mentor middle managers to take on greater responsibility as the organisation expands. 4. Measuring people metrics – Track turnover, employee engagement, and time‑to‑productivity alongside traditional financial KPIs.
Founders who embed these practices into their growth plans are better positioned to navigate the inevitable challenges of scaling. They can attract investors who value sustainable growth, retain top talent in competitive markets, and ultimately deliver products that meet real customer needs.
The narrative around startup success is evolving. While a breakthrough idea remains essential, the people who bring that idea to life are equally critical. By treating talent acquisition, culture, and leadership development as core components of a scaling strategy, startups can move beyond early hype and build lasting, globally relevant businesses. The companies that master this balance are likely to set the standard for the next generation of high‑growth ventures.