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High Growth Handbook

High Growth Handbook

Scaling Startups from 10 to 10,000 People
by Elad Gil 2018 344 pages
4.06
2k+ ratings
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9 minutes
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Key Takeaways

1. Build a Strong Organizational Foundation for Hypergrowth

If you are growing fast, you have a different company every 6–12 months

Embrace change. As your company scales rapidly, expect to revamp your organizational structure every 6-12 months. This constant evolution is a sign of success, not instability. Focus on building a flexible and adaptable organizational scaffold that can support your growing team and evolving business needs.

Prioritize key roles. Hire executives who can handle your company's needs for the next 12-18 months, rather than trying to find someone who can manage a much larger organization. Key early hires should include:

  • A strong VP of Product to drive product strategy and execution
  • A capable CFO to manage finances and prepare for future funding rounds
  • An experienced COO to handle day-to-day operations and scale processes

Implement essential processes. As you grow, introduce lightweight but effective processes to maintain efficiency:

  • Regular all-hands meetings to keep everyone aligned
  • Structured interview processes to ensure consistent hiring
  • Clear communication channels between departments
  • Flexible project management tools to adapt to changing needs

2. Master the Art of Hiring and Retaining Top Talent

Never, ever compromise: Hiring for culture

Prioritize cultural fit. When hiring, look beyond just skills and experience. Seek candidates who align with your company's values and mission. This alignment will lead to higher retention rates and a more cohesive team, especially during periods of rapid growth.

Develop a robust hiring process:

  • Write clear job descriptions outlining both responsibilities and cultural expectations
  • Use structured interviews with consistent questions for each candidate
  • Implement work sample tests to assess practical skills
  • Conduct thorough reference checks, including back-channel references

Retain top performers. As your company grows, focus on keeping your best employees engaged:

  • Offer competitive compensation packages, including equity
  • Provide opportunities for professional growth and learning
  • Recognize and reward high performers
  • Create a positive work environment that fosters collaboration and innovation

3. Cultivate a Dynamic and Evolving Company Culture

You need to codify a set of principles and behaviors and then cohere to them, culturally.

Define and communicate your values. Clearly articulate your company's core values and principles. These should guide decision-making at all levels of the organization and serve as a north star during periods of rapid change.

Evolve thoughtfully. Recognize that your culture will naturally change as your company grows. Instead of trying to preserve the early-stage culture at all costs, focus on steering its evolution in a positive direction:

  • Regularly reassess and update your cultural principles
  • Communicate changes clearly to the entire organization
  • Lead by example, demonstrating the behaviors you want to see

Foster inclusivity. As you scale, prioritize building a diverse and inclusive workplace:

  • Implement diverse hiring practices
  • Create employee resource groups
  • Offer unconscious bias training
  • Ensure equitable opportunities for advancement

4. Optimize Your Board of Directors for Strategic Guidance

Your board members are among the most important people you will ever "hire" for the company.

Choose board members strategically. Select individuals who can provide valuable guidance and connections as your company grows. Look for:

  • Relevant industry expertise
  • Experience scaling companies
  • Complementary skills to your executive team
  • Strong networks in your target markets

Manage board dynamics effectively:

  • Keep the board size manageable (5-7 members is often ideal)
  • Clearly define roles and expectations for each board member
  • Prepare thoroughly for board meetings with concise, informative materials
  • Use board meetings to gain strategic insights, not just report on operations

Evolve your board over time. As your company matures, your board needs will change:

  • Add members with public company experience as you approach IPO
  • Consider removing early-stage investors who may no longer add value
  • Bring in independent directors to provide fresh perspectives

5. Navigate the Complexities of Late-Stage Financing

Valuation is temporary. Control is forever.

Understand your options. As your company grows, you'll have access to a wider range of funding sources:

  • Traditional venture capital firms
  • Growth equity funds
  • Public market investors (e.g., mutual funds)
  • Strategic corporate investors
  • Sovereign wealth funds

Optimize for control, not just valuation. When negotiating late-stage rounds:

  • Resist giving up board seats or veto rights over key decisions
  • Consider selling common stock instead of preferred stock to maintain control
  • Negotiate for founder-friendly terms, such as limited liquidation preferences

Plan for secondary sales. As your company's valuation grows, consider allowing employees and early investors to sell some of their shares:

  • Implement a structured secondary program to manage the process
  • Use secondary sales as an opportunity to realign incentives and clean up your cap table
  • Be cautious about the timing and size of secondary sales to avoid negative signals

6. Develop a Robust Product Management Strategy

Great product management organizations help a company set product vision and road maps, establish goals and strategy, and drive execution on each product throughout its lifecycle.

Build a strong product team. Hire product managers who possess:

  • Strong product taste and intuition
  • Ability to prioritize effectively
  • Strategic thinking skills
  • Excellent communication abilities
  • Data-driven decision-making capabilities

Implement effective product processes:

  • Create clear product requirement documents (PRDs)
  • Hold regular product review meetings with key stakeholders
  • Establish a structured launch process and calendar
  • Conduct post-launch retrospectives to continuously improve

Balance short-term execution with long-term vision. Effective product management requires:

  • Setting a clear product strategy aligned with company goals
  • Prioritizing features and initiatives based on user needs and business impact
  • Continuously gathering and incorporating user feedback
  • Staying agile and adapting to changing market conditions

7. Leverage Marketing and PR to Build Your Brand

PR gives the company a way to communicate their purpose. It also helps humanize the company.

Develop a comprehensive marketing strategy. As you scale, your marketing efforts should evolve to include:

  • Growth marketing: Focus on data-driven user acquisition and retention
  • Product marketing: Communicate your product's value proposition effectively
  • Brand marketing: Build long-term brand awareness and loyalty
  • PR and communications: Shape your company's narrative in the media

Invest in strategic PR. Effective public relations can:

  • Enhance your company's credibility
  • Attract top talent
  • Support fundraising efforts
  • Build relationships with key industry stakeholders

Be prepared for crises. Develop a crisis management plan that includes:

  • Clear communication protocols
  • Designated spokespersons
  • Pre-approved messaging for common scenarios
  • Regular media training for key executives

8. Prepare for the Transition to a Public Company

Companies should go public as soon as they can. Increased transparency and accountability is always a good thing.

Recognize the benefits of going public:

  • Access to public market capital
  • Increased ability to attract and retain talent
  • Enhanced credibility with customers and partners
  • Liquid currency for acquisitions

Prepare your company for public scrutiny:

  • Implement robust financial controls and reporting systems
  • Build a board with public company experience
  • Develop investor relations capabilities
  • Create a long-term strategy that can be communicated to public market investors

Time your IPO strategically:

  • Consider market conditions and your company's growth trajectory
  • Ensure you have predictable financial performance
  • Build a track record of meeting or exceeding projections
  • Assemble an experienced team to manage the IPO process

Last updated:

FAQ

What's High Growth Handbook about?

  • Scaling Startups: High Growth Handbook by Elad Gil focuses on providing tactical advice for scaling startups from small teams to large organizations, specifically from 10 to 10,000 employees.
  • Real-World Insights: The book includes interviews with successful entrepreneurs and investors, sharing their experiences and lessons learned during high-growth phases.
  • Comprehensive Guide: It serves as a comprehensive guide for founders and executives looking to understand the intricacies of scaling a business, covering topics like hiring, culture, product management, and financing.

Why should I read High Growth Handbook?

  • Valuable for Founders: This book is particularly beneficial for founders and CEOs who are navigating the complexities of scaling their companies.
  • Practical Insights: Elad Gil emphasizes practical, actionable strategies rather than theoretical concepts, making it a useful reference for real-world challenges.
  • Expert Perspectives: Readers gain access to the thoughts and strategies of industry leaders, which can inspire and inform their own approaches to business challenges.

What are the key takeaways of High Growth Handbook?

  • CEO Responsibilities: The role of the CEO is multifaceted, focusing on setting direction, managing reports, and effectively communicating with the board.
  • Hiring and Culture: Emphasizes the importance of hiring the right executives and maintaining a strong company culture as the organization scales.
  • Adaptability: Organizations must be willing to adapt their structure and processes as they grow, recognizing that there is no one-size-fits-all solution.

What are the best quotes from High Growth Handbook and what do they mean?

  • HR Importance: “If you don’t start layering in HR once you’ve passed 50 people on your way to 150, something is going to go badly wrong.” This highlights the critical need for structured HR processes as a company grows.
  • Saying No: “You have to get really good at saying no.” This emphasizes the importance of prioritization and focus for CEOs.
  • Delegation: “The biggest change people fail to make is that at some point your job becomes more about hiring people and working with them to get what you want done than doing it yourself.” This underscores the transition from hands-on management to effective delegation.

How does High Growth Handbook define the role of the CEO?

  • Strategic Direction: The CEO is responsible for setting the overall direction and strategy of the company, ensuring alignment across the organization.
  • Team Management: They must effectively manage their reports, fostering a culture of accountability and performance.
  • Resource Allocation: The CEO also plays a key role in raising and allocating capital to support the company’s strategic goals.

What specific methods does Elad Gil recommend for managing a board?

  • Regular Communication: Gil advises CEOs to maintain open lines of communication with board members, ensuring they are informed about company developments and challenges.
  • Structured Meetings: He suggests having a clear agenda for board meetings, focusing on strategic discussions rather than just operational updates.
  • Feedback Mechanism: Establishing a feedback loop where board members can provide insights and advice while feeling valued as part of the team is crucial.

What are the best practices for recruiting talent according to High Growth Handbook?

  • Job Descriptions: Gil emphasizes the importance of writing clear job descriptions for every role to ensure alignment on expectations.
  • Structured Interviews: He recommends asking every candidate the same questions to facilitate fair comparisons and evaluations.
  • Diversity Focus: The book highlights the need for diverse candidate pools and strategies to eliminate biases in the hiring process.

How does High Growth Handbook address hiring practices?

  • Hiring Filters: The book suggests implementing strong hiring filters to ensure candidates align with the company’s core values.
  • Cultural Fit vs. Diversity: Gil emphasizes the need for a balance between cultural fit and diversity in hiring.
  • Avoiding Compromise: The book warns against compromising on hiring standards for the sake of filling positions quickly.

What strategies does High Growth Handbook recommend for managing company culture?

  • Communicate Changes: As companies grow, leaders must communicate necessary cultural changes to their teams.
  • Hiring Practices: The book suggests that hiring practices are one of the most significant levers for shaping company culture.
  • Rewarding Behavior: Gil advises that behaviors aligned with company values should be emphasized and rewarded.

What insights does High Growth Handbook provide on product management?

  • Role of Product Managers: The book defines the role of product managers as the cross-functional owners responsible for a product's success.
  • Importance of PRDs: Gil emphasizes the significance of clear product requirement documents (PRDs) in driving agreement and execution.
  • Communication Skills: Effective communication is highlighted as a critical skill for product managers.

How does High Growth Handbook suggest handling late-stage financing?

  • Understanding Investor Types: The book outlines different types of late-stage investors, including traditional VCs, hedge funds, and family offices.
  • Negotiating Terms: Gil advises founders to be cautious about the terms they agree to, particularly regarding control and preferences.
  • Secondary Sales: The book discusses the importance of secondary sales for founders and employees, allowing them to diversify their holdings.

What are the common pitfalls in scaling a startup according to High Growth Handbook?

  • Ignoring Culture: One common pitfall is neglecting company culture during rapid growth.
  • Overhiring: Gil warns against overhiring, which can lead to bloated organizations and inefficiencies.
  • Lack of Focus: The book emphasizes the importance of maintaining focus on core business objectives.

Review Summary

4.06 out of 5
Average of 2k+ ratings from Goodreads and Amazon.

High Growth Handbook receives overwhelmingly positive reviews, with readers praising its practical advice for scaling startups. Many find it an essential reference for founders and executives, covering topics like management, fundraising, and organizational structure. The book's format, combining the author's insights with interviews from industry leaders, is generally well-received. Readers appreciate its tactical approach and real-world examples. Some criticize its length and occasional lack of depth, but most agree it's a valuable resource for those in high-growth environments, particularly in Silicon Valley.

Your rating:

About the Author

Elad Gil is a prominent entrepreneur and investor in Silicon Valley. He has extensive experience in building and scaling startups, having worked with companies like Twitter, Airbnb, and Stripe. Gil is known for his insightful blog posts on startup growth and management, which formed the basis for his book. His expertise spans various aspects of company-building, including product development, hiring, and fundraising. Gil's background as both a founder and investor gives him a unique perspective on the challenges faced by high-growth companies. He is respected in the tech community for his practical, no-nonsense approach to startup advice and his willingness to share his knowledge openly.

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