What Founders Get Wrong About Scaling – With Carta’s CEO
Mar 7, 2025
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Henry Ward, co-founder and CEO of Carta, shares insights from over a decade of scaling his company. He discusses the importance of hiring 'missionaries' over 'mercenaries' to maintain company culture. Ward emphasizes the crucial timing of achieving product-market fit and reveals the evolving role of a CEO in building effective systems as a company grows. He highlights focusing on input metrics rather than just revenue for sustainable growth and underscores the necessity of clear written communication in shaping company culture.
Hiring missionaries fosters a passionate culture essential for innovation, while balancing mercenaries provides stability as companies scale.
Achieving true product-market fit is crucial before scaling sales efforts to avoid costly pitfalls masked by premature go-to-market strategies.
Deep dives
Hiring Missionaries vs. Mercenaries
When building a team, the choice between hiring missionaries or mercenaries is vital. Missionaries are passionate about the mission and willing to endure challenges for the sake of the company's vision, making them valuable in the early stages of a business. However, as a company grows, balancing these with mercenaries, who may be primarily motivated by job security, becomes necessary. The challenge lies in maintaining a missionary culture even as the team scales, as these individuals are often more difficult to manage but are essential for fostering innovation and commitment.
Understanding Product-Market Fit
Product-market fit is crucial for any startup and is characterized by significant demand for the product being offered, often exemplified by customers seeking out the product despite operational shortcomings. A common pitfall for founders is rushing into sales before achieving this fit, which can lead to hidden problems masked by aggressive go-to-market strategies. This false sense of security can result in costly expenditures on sales efforts without a solid foundation. It is important for founders to invest time in ensuring that their product meets the market's needs before expanding their sales force.
Balancing Outputs and Inputs
As companies grow, there's a tendency to focus on outputs such as revenue, which are lagging indicators, rather than the inputs that drive those results. Encouraging an input-driven culture can help teams concentrate on factors that predict future success rather than merely reporting past performance. Founders often struggle with this transition as teams may naturally gravitate towards celebrating immediate outcomes, which can warp priorities. A focus on inputs, however, allows for more sustainable growth and clearer pathways to achieving long-term targets.
The Role of Transparency in Leadership
Transparency in communication is essential, yet it must be managed carefully to prevent unnecessary stress among employees. Founders often face the dilemma of revealing too much information, like financial details, which can lead to misunderstandings or anxiety within the team. Effective leaders must find a balance between being transparent about challenges and shielding their team from external pressures that they may not fully grasp. Combining transparency with protective communication strategies can foster a stronger company culture while maintaining morale during tough periods.
Henry Ward, cofounder and CEO of Carta, has spent over a decade scaling his company from an early-stage startup to a 2,000-person industry leader. In this a16z Speedrun conversation with Games partner Josh Lu, Henry shares hard-earned lessons on:
Hiring missionaries vs. mercenaries — and how to keep company culture intact as you scale
The reality of product-market fit and why many founders try to sell too soon
The evolution of a CEO — from building a product to building a system around you
Inputs vs. outputs, and why companies should focus on the right leading indicators
Transparency in leadership, including when (and when not) to share
This episode is packed with candid insights and lessons on company building. Recorded live at the a16z Speedrun program, you can learn more at a16z.com/games/speedrun.
Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
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