In the startup race, speed rules. Founders chase rapid scale. VCs chase billion-dollar valuations. Everyone’s sprinting to grow fast and dominate first. But in the frenzy to scale products and teams, one critical system is often ignored: the people strategy.
Here’s the brutal truth: you can scale tech, users, and revenue but if you don’t scale your people, your company becomes a loaded grenade with the pin half-out.
Scaling Without People
It’s a common story: a startup raises over $100 million, quickly grows its team, opens new offices, and rolls out more products. But while tech and sales move fast, key people’s functions like hiring, culture, leadership training, and communication often fall behind.
According to CB Insights, 70% of VC-backed startups that failed in 2022 pointed to problems with people, not product or market as a major reason.
Case Studies
Better.com – Bad Culture Is a Product Flaw
Better.com surged to a $7B valuation during the pandemic but unraveled quickly due to toxic leadership and poor culture. CEO Vishal Garg’s abrupt Zoom layoffs of 900 employees sparked backlash, leadership exits, and stalled IPO plans. An internal review confirmed that a weak people strategy was the company’s critical failure.
WeWork -The Founder’s Shadow
WeWork’s $47B surge collapsed under founder Adam Neumann’s unchecked control and toxic culture. Neglected HR and unclear leadership led to a stalled IPO and massive value loss. The lesson: visionary founders can’t replace strong, scalable people strategy.
How Smart Startups Are Changing the Narrative
Leading VC-backed startups are getting the message early. Notion, amid rapid growth, focused on hiring “builders with humility,” coaching new managers, and cultivating diverse talent from the start.
Similarly, Figma scaled while prioritizing a strong, values-driven culture, with CEO Dylan Field highlighting “cultural stewardship” as integral to leadership. Both prove that culture isn’t accidental, it’s built deliberately.
Investors Must Drive Change
Investors have a big impact but often focus too much on numbers like CAC and LTV, missing important issues like how well a company’s team and leadership can grow. Some top VCs, like Andreessen Horowitz and First Round Capital, are changing this by offering help with team structure and leadership from early stages showing that people strategy is essential for lasting success.
The Verdict: No People Strategy, No Real Growth
A business plan without a solid people strategy is just an idea with no foundation. People drive every part of a company product, process, and profit. Treating HR as just a checkbox puts growth at risk, while making people strategy central ensures lasting success. Founders, CEOs, and investors must stop seeing talent as a later step because without growing your people, nothing else can truly grow.
