Growing Smart

J.J. Allaire

Founder, Chairman, and
Executive VP of Products
Allaire Corp.
Cambridge, Massachusetts

Growth comes down to a simple but crucial question: What type of company do you want to create or to work for -- a "lifestyle" company that emphasizes organizational culture or a high-growth, investor-backed company? Those are two birds that don't flock together. I see so much heartache among people in lifestyle companies that have achieved some success and that have started to get a little backing from independent investors. Suddenly priorities start to shift: Value lies in growth, not in the culture. So people worry about maintaining the integrity of the culture, the intimacy, the way things used to be done. That's fine if you're, say, an elite advertising agency and you see growth as diluting the culture and the vibe. But if not, you've got to grow like crazy.

The trickiest challenge that I've faced was transforming the company from a relatively small startup into something bigger. Initially we were a tight group of people. But we knew we needed to scale up the company and to hire more experienced management. For a while, I tried to be CEO, but it didn't take me long to realize that being a manager was not one of my strengths. While searching for a CEO, I was attracted at first to candidates who were like me -- who had a firm grasp on technology and strategy. It's tempting not to hire people who compensate for your weaknesses -- because you don't want to admit that you have any. But to smooth the transition during your period of growth, you've got to understand the strengths and weaknesses of your entire group and to hire accordingly.

J.J. Allaire jallaire@allaire.com cofounded Allaire Corp. with his brother Jeremy in 1995. Later that year, they launched Cold Fusion, a popular Web-development system that allows companies to integrate back-end services. That product generated $1 million in revenues. In 1997, Allaire Corp. acquired HomeSite, a leading code-based HTML-editing tool, and experienced a growth in revenues of almost 400%. The company now employs 140 people.

Charles Conn

CEO and Cofounder
CitySearch
Pasadena, California

Growing is the easy part. What's challenging is to integrate new people into your company in a way that allows you to keep up with its growth. In one six-month period, we grew from 100 to 500 people. It was incredible. We made sure that we hired well -- and that takes an enormous amount of time. It's not something that you can delegate to an HR department that then outsources the job to headhunters.

Instead, we've learned to tap into everybody's personal network. Nepotism is alive and well at CitySearch. For instance, in our Salt Lake City office, we've got three people from the same family. Nepotism is a way for us to hire people who have similar backgrounds, and who already have relationships with people in the company.

But smart growth doesn't stop there. To smooth the integration process, create an environment where there's open and rapid communication -- where new employees see and hear everything that happens. Make every project a team project, and assign every new employee to one of the teams. That's the best way to learn.

In 1995, Charles Conn charles@citysearch.com left McKinsey & Co., where he was a partner and a leader in its worldwide growth strategy practice. He then cofounded CitySearch, an Internet guide to community resources. By the end of 1998, CitySearch expects to serve more than 25 cities worldwide.

Richard Masterson

President and Cofounder
US Interactive Inc.
Philadelphia, Pennsylvania

Before focusing on the tactical issues of growth, step back and get some perspective on how it will change your life. A growth spurt will change the dynamics of your company -- and it can challenge you to maintain a life. Last year, we added one new person per week to our company. That may not sound like a lot of new people -- but believe me, the processes that worked well when we had 40 people didn't work so well when we reached nearly 100. We had to devote a lot of time and energy to reinventing our systems and strategies. The tendency is to say, "I'll just work harder." But pretty soon, all you're doing is working. You forget who your family is and what life is all about. You risk losing what got you into the game in the first place.

As you grow, it's also important to maintain a sense of humanity. My father worked for General Motors for 32 years. One Friday, someone "early retired" him. In just a year, I watched him age 10 years. I remember telling myself that I'd never work for a big company like the one that let him go. But now I am a big company. I used to worry about what I needed to do to provide for my family. Now I have 200 families to worry about. That's an awesome responsibility, and I never want our growth to make me lose sight of it.

Richard Masterson rmasterson@usinteractive.com is a pioneer of interactive marketing. In 1991, he cofounded US Interactive, an Internet professional-services firm with such clients as IBM, the American Stock Exchange, and Martha Stewart Living Omnimedia LLC. Since 1996, the company has grown from 6 employees to more than 200. It now has offices in Philadelphia, New York, Los Angeles, Seattle, and Washington, DC. In 1997, the company's revenues grew from $2 million to $6.5 million.