Startup Growth Challenges: The Downfall of Becoming Internally Focused

"What happened to our focus? I remember when all we cared about was shipping products and helping customers. Now, all we talk about is internal policies, staff politics, and endless meetings about meetings. We're losing our edge — how do we change it up?"

November 16th, 2022   |    By: Wil Schroter    |    Tags: Strategy

There's an inflection point in growing startups where our focus shifts from building products and helping customers to hiring staff and dealing with internal bullshit. That shift in focus is the death knell for growing startups as it slowly and completely takes our eye off the ball.

An effective business leader cannot lose focus on day to day operations, or the bigger picture.

If we look at larger companies we can see this in full view. 90% of their focus (sometimes all of it) is spent internally with warring parties and fiefdoms more focused on their jobs and career paths than anything the company actually produces. (I've made the argument before that all the important stuff was probably done long before them anyway.)

Our job as Founders is to do everything in our power to prevent this loss of focus, and it absolutely starts with us.

How Does All This Happen?

It creeps up on us slowly. We think of "growth" and "scaling" as good things — it's a sign of our prosperity, right? What we don't calculate is the cost of our focus. While hiring lots of engineers may sound promising, it's also a massive drain of that very same focus.

Everyone loves to brag about their ballooning headcount but at what cost? Now that we have 100 people to maintain, we have to spend gobs of time on internal policies, cultural decisions, and communications that used to get spent just building shit and making customers happy.

Every time we hire another manager, we're adding to the problem. Managers by definition are spending valuable cycles trying to coordinate their staff, which is inherently inwardly focused. The more managers we hire the more coordination they need, and the more cycles get eaten up internally. It builds, and builds, and builds.

For startup founders, losing customers short term and keeping long term existing customers are equally as important in his or her eyes.

Where it Breaks

For startups specifically, we're typically building all of this infrastructure overnight, which means all of the systems to manage people need to be established (read: made up) quickly, which draws directly from our outward focus. It's gotta come from somewhere!

It also usually doesn't go very smoothly. We've got a whole new team that just got hired 5 seconds ago managed by people who in some cases have never managed at this scale all led by a Founder (us) who probably never ran a company before. It's the most inefficient pile-up you could plan for, and yes, it is a massive resource hog.

What's worse — we don't even see it coming. We're so busy trying to recruit that talent, set up those systems, and build that culture that we totally lose sight of the fact that we used to spend all of that time on the things that paid for all of these people to be here, to begin with.

No other employees build relationships with existing customers through the sales process like the sales team, so if a leader only does the bare minimum and doesn't respond quickly to dig deep in business practices, this could fall short for a customer.

How Do We Fix it?

As Founders, we have to step back and remind ourselves what we built this company for. We built a company to solve a specific problem and delight customers with the solution — not to wallow in meetings about upcoming meetings.

It's our job to remind all of our staff that our focus lies outside of these metaphorical four walls. While we need to tend to things internally, it's never at the expense of our external focus. Our customers, product, and revenue are the focus. Everything else is backfilled.

In essence, reminding ourselves where our focus should be is how we regain our focus. You've never heard of a company that succeeded so well in its market because of how well it ran off-site meetings. It's about setting (or resetting) priorities for everyone — now.

If we can't regain our focus externally, that next scrappy competitor will do it for us. Let's not lose the war because we lost our focus.

In Case You Missed It

The Cost of Toxic Employees (podcast). We all know the value of having a star player on our team. But what about the opposite? Wil and Ryan discuss how to identify and handle toxic teammates before their impact spreads across the organization.

How Does a Founder Get Fired? Fired as the Founder — totally a dream or a nightmare come true?

Fighting Cynicism In Company Culture. What are the root causes of cynicism? And how we keep it from contaminating our company?

About the Author

Wil Schroter

Wil Schroter is the Founder + CEO @, a startup platform that includes BizplanClarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.

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