When we think of a startup, we usually think of innovation, flexibility, and fast-paced working environments. However, even in their most agile form, a startup needs structure. This is where startup hierarchy comes in known for accountability, providing clear personnel duties as well as a growth belt.

Whether launching a startup or looking to join one, knowing how the hierarchy generally works gives good insight into behind-the-scenes operations.

Why Does Hierarchy Matter in a Startup?

At first sight, structure may seem to be an antonym of innovation, but the early days of a startup cannot do without a degree of organizational hierarchy. They do the following:

• Rightly allocate responsibilities and clarifying roles
• Avoid gridlocks in decision-making
• Share accountability and improve communication
• Promote a scalable mechanism for growth

Flat in nature at start, startups find it viable overtime to organize. When the company ebulliently expands, getting a clear hierarchical structure acquires indispensability.

What Are the Hierarchy of a Startup?

Let’s quickly go through the different types of hierarchy which may exist in a startup,both in the structure top down.

1. Founders/Co-founders

At the very top of the hierarchy are the people who were there from the beginning-the founders or co-founders. They are responsible for nurturing an idea into a viable business.

Overall Responsibilities:

• Defining the mission and objectives
• Actually building the product/service
• Securing funding opportunities
• Hiring the first members of the team
• Establishing company culture

Founders will often do many roles starting out, everything from CEO to marketer to customer service rep.

2. C-Level Executives (C-Suite)

As the organization grows, the founders may hire professionals to manage different departments.

More common C-level positions include:

• CEO (Chief Executive Officer) – Responsible for the company’s strategy and growth path.
• CTO (Chief Technology Officer) – Responsible for tech management and Product development.
• COO (Chief Operating Officer) – Responsible for all operational aspects and logistics.
• CFO (Chief Financial Officer) – Responsible for financial planning, cash flow management, and investor relations.
• CMO (Chief Marketing Officer) – Responsible for marketing, branding, and building explosive growth for the company.

In early stage startups founders often continue to fulfill any of these roles until they have leaders that have experience and willingness to specialize in one of these roles.

3. VPs and Directors

Next, there are Vice Presidents (VPs), and Directors responsible for leading specific functions like marketing, product, engineering, sales or HR.

Overall Responsibilities:

• Manage teams within a department
• Develop and deliver on department-specific objectives and strategies
• Report to C level leadership
• Support team members to align with business objectives

At some point in a company’s evolution, this layer will be necessary as teams grow to more than 5 to 10 employees per function.

4. Team Leads and Managers

At this level, team leaders will be doing the work with you. They manage smaller groups within a department, such as a Marketing Manager, Product Manager, or Tech Lead.

Duties:

• Daily task assignment
• Performance tracking
• Team communications
• Mentorship and support

They act as the connection between the strategy (from above) and execution (from below).

5. Individual Contributors (ICs)

Individual contributors are the backbone of any startup. They are designers, developers, marketers, salespeople, and other practitioners executing the hands-on work.

ICs are often:

• Agile and learning
• Cross-functional
• Part of the ideative and feedback loops
• Tumultuously closer to the customer or user

In startups, they end up taking on larger roles than they would have in their previous corporate role.

How Hierarchy Changes Over Time?

Startups go through different phases, and therefore as a result they have a hierarchy:

Stage	Structure
Early Stage	Flat, everyone wears many hats
Growth Stage	Mid-level managers introduced
Scaling Stage	Departmental silos form, more C-levels and directors
Mature Startup	Resembles a traditional org chart

Frequently Asked Questions

1. Why is hierarchy important in a startup?

Hierarchy can create clarity, accelerate productivity, and facilitate effective separation of responsibilities, particularly as the startup begins to grow.

2. Do all startups have hierarchy?

No. This will differ for all startups. Many startups will function with a flat structure for some time, but as the startup grows, hierarchy develops to manage complexity.

3. What is a flat hierarchy in a startup?

A flat hierarchy has few or no intermediate levels of management. People work together much more collaboratively, decisions are made faster, and the decision-making speed can lead to some confusion if things aren’t buttoned down in terms of roles.

4. How does a startup’s hierarchy develop?

It develops from flat and flexible to layered and organized as more individuals come on board and the operational processes become more specialized.

5. Who usually makes hiring decisions in a startup?

At a startup, initially it will be handled by the founders. However, as the startup grows, recruiting will usually be handled by department heads, and for higher level hires, HR, in accordance with the role and seniority.

6. What are some common challenges associated with startup hierarchies?

• Dual responsibilities
• Lack of clarity regarding decision-makers
• Unwillingness to adopt formal roles during the transition from flat to structured.

Conclusion

Every startup is different, but having a distinct hierarchy (even if it is minimal) increases the likelihood of good communication, quick decision-making, and healthier growth. You want to establish some kind of structure that provides value for your team, is flexible as you grow, and maintains the speed and flexibility of a startup.

Whether you are starting a company or joining one, understanding how a hierarchy works will help you manage the startup environment effectively.

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