OK I lied, it’s not simple at all! Startup operations eludes straightforward definition, as does operations in general. There are however some commonly used frameworks to help you get your head around it.
In short, it depends on the nature of the startup and its structure. But the fundamental purpose of ops is the same in a startup as in a more traditional organisation. Ops is about leading people, solving problems, and managing resources efficiently to deliver high quality products and services. Practically speaking, this often boils down to creating policies and processes that drive those efficiencies and enable collaboration between departments.
Are you looking to make a career move into startups and your experience is in operations? It’s important to understand what ops means in this setting and how it affects your job prospects. Don’t be put off by worrying whether your skills are transferable into this environment. They almost certainly are, provided you target the right kind of roles at the right kind of startups.
Equally if you’re a founder and haven’t figured out what ops means to your company, bear in mind your growth will rely on a robust operational foundation. To that end it’s highly advantageous to design and build that structure sooner rather than later.
Operations in early stage startups versus mature startups
The stage a company’s at in terms of age and scale make a substantial difference to the realities of operations in a startup environment.
Operations roles in earlier stage startups are usually more fluid and varied, spanning multiple functions that may even go beyond what would usually be considered ops. There can be opportunities to progress rapidly but compensation and benefits will be less generous. Also formal development opportunities will be limited, and there’s a risk the company could outgrow you.
By comparison ops roles in later stage startups are often more rigid and specialised. This means a higher barrier to entry and slower progression, but better compensation, benefits and formal development options.
Founders should keep in mind the ideal candidate profiles to fill operations roles differ significantly depending on the stage a company’s at.
Early stage startup operations
In the early days the operations function typically has more diverse responsibilities, so roles are inherently more generalist. At the beginning of the journey even a director or head of operations may find themselves managing payroll (finance), drafting employment contracts (HR/legal) and ordering office furniture (facilities). And that’s on top of their core business, which especially in an operationally intensive startup could be very substantial and time-consuming.
A broad command of management and leadership is invaluable for early stage startup operations roles. As is a willingness to get your hands dirty.
Scale-up and later stage startup operations
The more mature the startup, the more likely management will differentiate operational roles. What started out as a generalist ops functions may develop into a cluster of specialised sub-functions. Some or all of those specialisms may break off and become standalone functions like operations strategy or compliance. Or they may move under the umbrella of a different high level function like sales or HR.
In some startups functions like finance, facilities and legal may remain under the operations umbrella even as the company scales. Whether this is the case depends on multiple factors including the industry, the intensity of operations, and the regulatory and legal context. The background of the lead ops person and founder preference.
High intensity (tech enabled) versus low intensity (high tech) startup operations
Typically in tech-enabled startups the product or service is physical and the tech facilitates its delivery. Whereas in high tech startups the product or service is digital i.e. it is the tech.
There’s a lot of nuance to this comparison because some highly operational startups prefer to style themselves as tech organisations. This could be because they outsource much of their operations to contractors and offer customers third party products e.g. a marketplace app using self-employed couriers to deliver goods for other businesses. For ease of understanding I’m deliberately aiming to keep things simple.
Operationally intensive startups
The best known example of a high intensity operation from the world of startups is Amazon (putting aside the fact its gargantuan size means it’s arguably not a startup any more!)
A large part of Amazon’s business is selling and delivering physical products to customers. That requires resource-intensive operational functions like last mile delivery, freight, procurement, warehousing and facilities management. In turn those functions need countless thousands of employees and contractors to keep them running, in spite of technological innovations like robotic warehouses and driverless vehicles. As I’m writing this post Amazon has more than 1 million workers, many of whom are contractors.
Operations managers at Amazon are therefore more likely to be managing people and processes in the physical space – and there are an awful lot of them. Of course there will probably be a variety of more and less specialised operational roles in such a high intensity operation, depending on the specific industry and the size of the organisation.
Generally speaking though, if your operations background is in something people-driven or customer-facing like the military, logistics, retail, construction or manufacturing, you’re more likely to find a relevant ops role in a highly operational startup. That’s especially true if you’re making your first foray into the startup world.
Other examples of operationally intensive startups are Uber (ride hailing), Deliveroo (last mile food delivery) and Stuart (third party logistics).
Operationally light startups
The best known example of low intensity operations in a startup is Facebook. Again it’s arguably not a startup any more… but the chances are you’re familiar with what they do!
Essentially Facebook’s sells all its services and products in the digital space. And more or less everything Facebook does for its customers is fully automated by technology. That means they require hardly any resource-intensive operational functions. It also means they require many fewer people than Amazon, relative to their scale. At the time of writing Facebook has around 50,000 workers, most of which are full time employees.
Operations managers at Facebook are therefore more likely to be managing processes in the digital space, including executing strategies for other business functions like marketing and sales. Of course Facebook also has operations managers working on strategy – as well as in customer service, HR, facilities, etc. – but far fewer proportionally than Amazon. Most roles at Facebook are high tech like software development, data science and digital marketing.
In short, if your operations background is more specialised – e.g. sales operations, marketing operations or technical project management – you’ll find it easier to get your first ops role in this kind of startup. It’s worth bearing in mind though that some hands on operational skills are sought after in more technical roles like product management, where the ability to bridge the gap between technology and people is more an art than a science.
Other examples of operationally light startups are Google (Google), Monzo (fintech personal banking) and TransferWise (fintech money transfer).