How to Organize a Startup Team Structure

Building a startup requires more than just an idea. It takes time to find the right people to join the team and make a well-organized startup team structure that'll grow together with the company. No two hierarchies are the same, and the org chart will differ based on the business model, goals, and needs.

On this page, we'll explain why making a clear tech startup team structure isn't a waste of time and go over some effective ways to organize one so it'll serve to benefit your business.

What Is a Startup Organizational Structure?

An organizational structure for startups refers to the hierarchy of the team and how the workforce is organized in a company. Such a framework is defined to outline which roles, duties, and responsibilities employees have and the relationships between them (such as chains of command showing who reports to whom). It's generally a schematic diagram representing the departments and key roles in a startup like stakeholders, executives, managers, and subordinates.

A lean startup organizational structure could be either flat or hierarchical. A flat org structure is made up of very few management layers or may have none whatsoever. In this case, every specialist works as a separate entity, reporting to the founders directly. As the business grows, the flat structure usually evolves into a more complex hierarchical startup organizational structure that implies additional management layers with supervisers, forming a pyramid.

What Are the Benefits of a Startup Org Structure?

There are plenty of advantages of having a concice and transparent org structure. As such, when the roles in a startup company are clear:

• the chances of hiring the wrong people go down;
• it becomes simpler to manage resources and keep everyone on the same page;
• all people start working toward common objectives and goals more effectively, minding the current OKRs and KPIs;
• task distribution, planning, and completion become more efficient, just as are the rest of the organization's operations.

In essence, all of this helps manage product development, boost productivity, and achieve growth. Many holes or voids in workflows can be avoided, making the internal processes much smoother.

Why Does a Startup Team Structure Matter?

Numerous startup founders mistakenly think that having a clear tech company organizational structure is uncalled for. However, if you don't define one, chances are high that it'll lead to commotion and disorder, in turn stumbling your decision-making and causing other business inconsistencies. Moreover, without a proper framework, your organization may struggle to efficiently recover IT assets, leading to potential losses and operational setbacks.

The bottom line is that a startup has to run like clockwork. And if you have issues with coordination, this will bring various losses and unnecessary chaos. Hence, the impact is rather significant.

Here are a few core reasons why it makes sense not to neglect having a tech startup team structure.

• You'll avoid problems with allocating resources incorrectly
  Be it money or human resources, to operate effectively, a startup has to ensure there's little to no waste of resources and startup budget, which becomes harder to control without a startup team structure as the company grows.
  
  
• You'll boost the efficiency of decision making
  To stay afloat, a startup has to be quick to spot the need for changes, react to them timely, and respond to them by making a business pivot or strategy change when the time is right without delay. A transparent tech company structure (when each person knows their area of responsibility) facilitates making decisions quickly, helps you stay competitive in the market, and allows for MVP agile development.
  
  
• Your communication and performance will be enhanced
  When teammates understand each other and know who to turn to with questions routed to the right people, this improves management, streamlines communication, improves collaboration, and aids timely task delivery. On the contrary, a lack of accountability and a startup team structure can result in wasted time, delays, misunderstandings, useless work, subaverage performance, disproportionate workload distribution, not enough input from some team members, and generally lower quality of work.
  
  
• Your startup will be more appealing to investors
  When your startup runs like a Swiss watch, pitching to investors becomes easier, too. You can demonstrate how well-organized your business is and that you're all working toward the same goals in accordance with a solid growth plan.

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Roles in a Startup Based on the Stage

It's no secret that starting a tech startup is really tough. That's why it is very common that one person has to take on multiple roles in the startup's early days. And as the company expands (especially if this happens at breakneck speed), it might get tough to reorganize processes, delegate responsibilities, and keep people on track.

Nonetheless, the startup organizational structure can vary depending on its current stage (e.g., pre-seed, seed, series A, etc.). Let's overview how.

Early Stage

At the earliest stages of a startup, it is the founder who commonly tends to have multiple roles. In the very beginning, this person may be a one-man band or a couple of co-founders who combine responsibilities. For example, the founder could also act as the Sales Manager, accountant, or even recruiter.

At this point, the team doesn't necessarily have to be large, as the product might only be at the validation phase, moving toward creating an MVP. Nonetheless, little by little, the team will expand from a solo founder or several co-founders thanks to new hires.

Designated roles will likely appear in the startup structure, but which ones precisely will depend on individual business goals and industry specifics. The minimal set of roles varies from one company to another, however, some key positions in a startup company at its early stage often include:

• a hired CTO to handle the technical side;
• a product manager to think through the product;
• a marketing specialist for promoting the company, handling startup branding, and generating leads;
• a salesperson for closing deals;
• an accountant to handle payrolls and financial operations;
• an HR manager for recruiting new people.

At this stage, it's also crucial to determine which tasks will be done in-house and which will be outsourced. For example, finance outsourcing can be a smart move for startups, allowing them to manage complex financial tasks without hiring full-time staff. This method provides access to expert services like bookkeeping, tax preparation, and financial analysis at a lower cost. By lowering operational expenses, startups can better manage their financial resources as they grow. Outsourcing finance lets them focus on their main activities while ensuring they meet regulations and gain valuable financial insights, all without the hassle of having a full finance department.

On occasion, the company may hire designers, developers, QA testers, and other specialists. Yet, oftentimes, instead of expanding the structure of a startup company internally, they turn to outsourcing providers to find a dedicated team. Hence, they don't employ such roles in-house (at least not yet), but they may be added on to the structure later. Similarly, many startups opt for outsourced CTO services to get the needed tech guidance early on without making an expensive hire.

Growth Stage

Once the product starts getting traction and the company grows bigger, the tech startup organizational structure expands too. This means the team gets enforced with an extra workforce, and many roles are delegated. A startup's org can be made up of several levels: executive and operational. Here's a rundown of the sample roles that are common during the growth stage.

Top Level Management

At the highest level of the startup team structure, there's the founder, who's the initiator of the project. This person's main responsibility is the startup's vision, mission, ground rules, startup culture fundamentals, core strategic decisions, and overall direction. In many cases, the founder has the Chief Executive Officer (CEO) role, it's the "captain of the ship" monitoring everyday operations and is among the most important decision-makers. Stakeholders and co-founders are commonly attributed to this top level too.

C-Level Management

The C-suite top management level is the driving force behind the entire startup. Oftentimes, co-founders take on "chief" roles in a technology company organizational structure. Here's a sample overview of several of these.

• The Chief Technology Officer (CTO) goes high in the tech startup org chart, this person is in charge of tech and decides how the product will be built from a technical standpoint (e.g., the chosen startup tech stack, architecture, scalability, and other fundamental tech strategy decisions).
• The Chief Financial Officer (CFO) is the go-to person for the company's finances. Major decisions on the operations, budget, cash flow, and regulations are their area of responsibility. For businesses seeking expert financial guidance without the full-time commitment, fractional CFO firms offer a flexible solution, providing seasoned financial leadership on a part-time basis.
• The Chief Marketing Officer (CMO) or Head of Marketing is at the top of the startup marketing team structure, the main responsibilities include promoting the company and its product, keeping an eye on the image and metrics, and developing an effective startup digital marketing strategy.
• The Chief Sales Officer (CSO) is in control of sales and turning potential customers into paying ones, strengthening the sales team and strategy, and finding new market opportunities.
• The Product Owner or Product Manager may sometimes be included in this level as this person is accountable for developing the product. He's there throughout the entire product development life cycle, selecting optimal features, changing the roadmap, and making sure the product meets the expectations of end users. 

D-Level Management

The management level with supervisors may go next in the startup team structure, depending on the company's size. These are the people who report to the C-level or heads of departments and coordinate the work of employees. For example, the Front-end Team Lead can report to the CTO or Project Manager about the work done by the front-end, back-end, and Quality Assurance teams, as well as the product development roadmap changes. Similarly, there can be an SMM Lead reporting to the CMO or other leads.

Operational Level

Operational roles are handled by the "busy bees". An ideal tech startup team structure can feature multiple departments and subdepartments. Below we'll go over several customary ones.

• The Design Department (UX/UI designers, graphic designers, and other specialists work on the product's website, app, and visuals).
• The Development Department (a tech department that works on coding and bringing the product to life, it may be broken into smaller teams and have such web development team roles as front-end developers, back-end developers, QA Engineers, DevOps specialists, and others).
• The Marketing Department (can also be divided into smaller teams such as SMM, content, SEO, and others; work on promoting the product and attracting prospects);
• The Sales Department (sales representatives communicate with clients to close deals and sell the products or services);
• The HR Department (recruitment and HR teams handle human resources tasks like executive search process, screening, interviewing, onboarding, and consequent retention);
• The Customer Support Department (a service team to address all incoming client concerns, complaints, and requests specializing in customer support for startups);
• The Financial Department (accountants and other reps who take care of the startup's financial operations, including handling income, expenses, and payrolls).

Certainly, there may be other teams and roles in a tech company org structure. If the startup works in the office, there could also be administrative roles like an office manager. A startup can have a Chief Operating Officer (COO) who manages day-to-day operations and helps out the CEO or a Business Development Manager to solidify the strategy. Likewise, the teams may be comprised of specialists with various levels of expertise, from Juniors to Seniors who may be placed in various layers of the tech company hierarchy chart.

The actual "lineup" is always different. Every startup has its own unique set of employees and roles. Nonetheless, as the number of people onboard expands, it's vital to keep things organized in a definitive startup company structure.

How Do You Hire the Best Startup Team?

You won't expand your tech startup organizational structure without hiring new employees. But how should you approach startup team scaling?

First of all, you have to ensure that you're ready to take on more people and enlarge the team. You must be certain that team upsizing is truly necessary and that now is the right time to fill these roles. Doing so prematurely can lead to many risks, like running out of money. When you're positive that more hires are required, you'll need to decide how you'll hire new people. Below we'll go over several common paths.

In-House Employment

The first option is employing people to join the company full-time and become a part of your tech startup team structure. In this scenario, you go through a lengthy candidate screening process followed by interviews and onboarding.

The person officially becomes part of your startup with all the payrolls, paid time off, hardware, insurance, etc. implied. The process of hiring developers for a startup or forming any other team or department this way is usually time-consuming and costly.

Hiring Freelancers

Many startups opt for alternatives, like finding freelancers. They turn to popular freelancer platforms like Upwork or Freelancer to sign individuals. Mind that hiring such contractors is a reasonable choice for short-term cases like when you need help in fulfilling a specific standalone task that you can delegate to a third party.

When choosing between freelance and outsourcing, the former is not a good idea if you plan to augment your startup team structure. Freelancers usually have limited availability, which can backpedal progress. Don’t overlook the usage of the right tools to assist with the hiring process. Using skill assessment software, such as VireUp or any of the HireVue competitors, can help you evaluate freelancers' capabilities before making a hiring decision.

Finding an Outsourcing Partner

The third alternative is to turn to outsourcing vendors who have large talent pools. There are many IT outsourcing models, however, generally, such providers give startups the opportunity to quickly augment teams, so you can create a hybrid workforce. Or, they may assemble a full team to take on your project (these specialists are sort of lent to the startup for a while and work on the product as if it was theirs).

The outsourcing vendor selection process has to be taken seriously, though, as you may face hidden costs or encounter unprofessionalism or bloated team sizes. But if you find a trustworthy partner with a proven track record, this can be a great way to build or scale your product.

It's not just for IT services, though. In this vein, it's not uncommon for startups to engage in lead generation companies, outsourcing B2B lead generation to others to ensure a focused and effective approach to building their customer base.

Other Options

Are there other ways to find talent or partners? Sure! Many entrepreneurs meet co-founders in special startup communities. Such startup groups were created for networking purposes and often have job boards. Moreover, some are even equipped with matching functionality (an algorithm selects people who can join forces and team up).

What is more, startups may also consider joining one of the top accelerators. The suitable option will depend on the startup's current stage (early or growth), but providing networking opportunities is among the perks incubator or accelerator programs.

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Building Your Startup Team Structure: Best Practices

Creating an org chart and keeping the information on it relevant is a hassle if you have to handle it all manually. Therefore, we gladly share a lifehack on how to accelerate and optimize procedures dealing with building and sustaining a startup organizational structure.

As most businesses use Slack for business communication, you can link up a handy bot called OrgaNice. Upsilon created this startup team structure tool to help other businesses make a team directory using the data in their Slack workspaces.

The bot uses AI to automate not only the org structure creation process but also helps keep data relevant as your business or startup scales. The chart is dynamic and keeps relevant employee contact details at hand, marks role changes, adds on new people when teams expand, or removes former employees.

Startup org structure chart visualization is very beneficial as employee visibility strengthens team awareness and increases transparency. Having access to up-to-date information can remove confusion, connect people, and alleviate many processes since people understand who they're working with and who to turn to. 

The bot ensures that fired staff are no longer featured in the tech company hierarchy and that the organization's workspace is filled with all the necessary information on existing employees. OrgaNice sends reminders and Slack notifications to employees to fill out profile details like their contact phone or email. This way, you don't have to waste time manually updating the org structure. Plus, the tool can send welcome messages, automating parts of the onboarding process.

Other Startup Structure Organization Tips

Apart from using handy startup tools, what else can you do to build a seamless startup team structure? Here's a plan you can follow.

1. Begin with a plan (outline your goals, specify your business model, and other vital details to fall back on as you start building a startup team structure).
2. Choose the key positions and departments (shortlist the most important roles for your business, including the "chiefs", and jot down the roles you need now and might need in the future and which departments you have).
3. Define roles and responsibilities (create job descriptions, noting what's expected of each role, like qualifications, skills, and requirements, to avoid confusion and simplify the search for candidates).
4. Select an organizational structure (the most optimal and best company structure for startups is based on the business type, you can go for a structure that's flat, matrix, functional, or team-based).
5. Decide on the core workflows (to eliminate bottlenecks and boost internal processes, mark how decisions will be made and the lines of communication. This is where platforms like HighGear can be an advantage as they help you streamline your workflows.).
6. Fill out the employee profiles (once you make the key hires, start filling out information on the employees, preferably with names, photos, occupations, and contact details, and put them in the right place in the hierarchy).
7. Keep the structure updated (to encourage collaboration, ensure that the information in the structure is relevant by regularly reviewing the chart and data, perhaps it is worth assigning someone to keep track of and adjust the chart).

Final Thoughts on the Company Structure for Startups

With employee turnover rates high, it is vital to keep up a healthy work environment and ensure the teams are well-coordinated. Having a clear startup organizational structure at hand can yield many internal processes, get multiple teams working in tune with each other, and a smoother flow of information and data exchange. This may lead to more effective management and better overall business results.

As we've mentioned earlier, you may use OrgaNice to simplify the process of creating and maintaining your startup team structure. And if you need a hand with product development or are lacking talent, Upsilon can assist you with MVP development services and offer IT team augmentation services too. Feel free to contact us to discuss your needs!

FAQ

1. What roles do you need in a startup?

It's safe to say that the required roles in a startup company highly depend on its stage. A company at the earliest stages usually has a very small startup organizational structure. In this scenario, co-founders commonly take on several roles and hires are very limited. As the startup grows, so does its headcount, often resulting in a more complex hierarchy with multiple layers.

2. What is team structure in a startup?

Implies the workforce hierarchy, showing the departments, roles, and relationships between employees, including the reporting structure and the chain of command. It is generally depicted in a diagram format or a startup organizational chart.

3. What is the organizational structure of a tech company?

If a startup's product is closely related to tech, the startup company organizational structure will have more technical roles in its employee hierarchy. For instance, apart from the standard departments, the company may have a technical co-founder, Chief Technology Officer (CTO), technical lead, and various developers.

4. What is the best organizational structure for a startup?

The best organizational structure for startup teams depends on the company's size, business model, and other peculiarities. As such, many start off with a flat org structure that grows into a hierarchical one after some time. Other structure types that startups sometimes choose include agile organizational structures and people-oriented ones.