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Reid Hoffman’s advice for startups: Sometimes you have to let fires burn

In an excerpt from his forthcoming book, ‘Masters of Scale,’ investor and entrepreneur Reid Hoffman shows—with a little help from Selina Tobaccowala—how young companies can prioritize for growth.

Reid Hoffman’s advice for startups: Sometimes you have to let fires burn
[Photo: Marco Verch/Flickr, CC BY 2.0]
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When you’re growing quickly, there will always be fires—inventory shortfalls, servers crashing, customers whose calls aren’t answered. You won’t always know which fire to stamp out first. And if you try to put out every fire at once, you’ll only burn yourself out. That’s why entrepreneurs have to learn to let fires burn—and sometimes even very large fires.

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When you have a fast-scaling company, the focus must be on moving forward. And you can’t do that if time is spent dealing with spontaneous, scattered eruptions. Fighting every fire can cause you to miss critical opportunities to build your business—you’ll be all reaction and no action.

The trick is knowing which fires can’t be ignored—the ones that might spread quickly and engulf your business—and which fires you can afford to let burn, even as the flames climb higher. Letting a fire burn takes nerves, vigilance, and lots of practice.

Sometimes you have to let fires burn


[Audio excerpted courtesy of Penguin Random House Audio, read by William DeMeritt.]

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Luckily for Evite cofounder Selina Tobaccowala, she had already put out a lot of fires by the time she arrived as vice president of engineering and product, at a funky little company called SurveyMonkey. The founder, Ryan Finley, had built an incredibly popular tool for online surveys, and managed to scale despite an extreme shortage of everything a company normally needs to do so. “He built the business without a penny of funding,” Tobaccowala notes. “There were essentially two developers and ten customer service agents—and that was it.”

When the startup’s leaders interviewed Tobaccowala to come join them, she became aware there were only three people doing all the coding, which was “amazing for a company doing that much revenue,” she says. But she knew it also meant the company was likely to have big problems as it tried to scale. Perhaps even more worrisome: Their system had no backup. Meaning that if it got corrupted or went down, all of the company’s precious survey data—the bread and butter of the business—could vanish without a trace.

With Tobaccowala onboard, the SurveyMonkey team sized up the odds of a data loss and determined this was a fire that couldn’t be ignored. Tobaccowala says solving a problem like that “is always invigorating,” in part because you have to balance what’s urgent—in this case, creating backup systems—against what isn’t.

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Masters of Scale: Surprising Truths from the World’s Most Successful Entrepreneurs by Reid Hoffman

When someone can look at potential business-ending disasters and find them invigorating, you know you’re dealing with an experienced firefighter. Once she had that blaze under control, Tobaccowala worked her way down a long list of troubles. SurveyMonkey, like every fast-growing startup, had no marketing plan, no strategy for international users, and a mess of code that made every customization a headache. Tobaccowala promptly hired engineers, marketers, UI designers, and translators—an army of specialists to take on these impediments to growth.

It would be easy to look at the state of SurveyMonkey when Tobaccowala arrived and characterize it as chaotic or mismanaged. But that would show a deep misunderstanding of how companies scale. Every successful startup is in a constant state of triage, and it’s common for fast-growing companies to pile up massive vulnerabilities as they prioritize strategic growth over long-term stability.

Sometimes this will mean taking shortcuts to build something fast (a product, a team, an office) that will need to be rebuilt—more solidly—later on. This may be hard for your team to accept. But as Tobaccowala says, “you are going to have to throw some resources away in the short term, and as long as you explain that to people as they’re doing the work, they also understand.” When you’re letting a fire burn, it’s important that your team realizes that, yes, you see the problem, and yes, your neglect is deliberate. If your team accepts this, it’s a good sign that you’ve hired the right people: people who can recognize and then calmly deal with problems as they arise—and who have a good sense of which fires are critical enough to require immediate attention, and which ones can be allowed to just burn for a while.

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From the book Masters of Scale: Surprising Truths from the World’s Most Successful Entrepreneurs by Reid Hoffman with June Cohen and Deron Triff. Copyright © 2021 by WaitWhat Inc. Published by Currency, an imprint of Random House, a division of Penguin Random House LLC. All rights reserved.