The experimentation-organization-optimize (EOO) loop

In the beginning of a startup, it’s important to adopt a experimentation phase to try different things. Since the future is unknown, there must be freedom to experiment. Buffer must be built into plans to allow for that.

After a set time for experimentation, the startup should move to the organization phase where processes are much more structured and organized. An ideal situation is that all startups functions are outsourced to staff, so the leader has a chance to step back and empower others to take the lead.

There is a limit to how much organization is needed. The ideal situation is just enough structure that is appropriate for the startup’s current situation, or a few funding cycles ahead. For example, a seed stage startup would do no good to have an organizational structure of a pre-IPO Series E company, but that of a Series A or even B structure would be more appropriate.

After the organization phase, the startup should move to an optimize phase to make processes more efficient. Processes should be analyzed to see how it can be shortened or made simpler, and discussions had to determine better processes to replace existing processes.

A startup should continuously make this EOO loops as it scales, in a fractal manner by assimilating more and more business opportunities, building first sets of processes, and then optimizing them. Startups that continue this EOO loop will continue to grow, whilst startups that don’t will cease to grow.