Why Startups Can't Outgrow Their People Problems

You can’t outgrow the cracks in your people strategy. They grow with you.

Startups move fast. However, the people side often lags behind.

In the rush to build products, land customers, and raise the next round of funding, aspects like hiring strategy, team development, and internal communication get pushed to "later."

Key Aspects of People Strategy

How you hire.

How you lead.

How you communicate.

How you support your team.

Most early-stage teams don't ignore these areas purposefully. They just assume, "We'll figure it out when we get there."

That delay creates "people debt." This is the compounding cost of underinvesting in your team, leadership, and culture early on. Just like tech debt, it doesn’t seem urgent until it starts to slow everything down.

The longer you wait to build your people foundation, the harder (and more expensive) it becomes to fix.

What Does People Debt Look Like?

• No clear roles or accountability → Rework, duplicate efforts, and frustration build, which slows the team down.

• Hiring reactively → Without clarity on what's needed, you mis-hire or bring in the wrong people at the wrong time.

• Undefined values or culture → This leads to inconsistent decisions, poor alignment, and eroded trust, ultimately causing unproductive team friction.

• Burned-out leaders → Leaders may not know how to delegate, coach, or scale their impact effectively.

• No systems for feedback or development → Your best people may either move on or quietly disengage.

  
  

These People Problems Don’t Disappear

They scale with your company. Left unaddressed, these small cracks turn into people debt, which compounds quickly as your headcount grows.

Here’s what that usually looks like:

• 1-25 employees: Everyone wears multiple hats. It’s chaotic but somewhat functional. The cracks exist but are easy to overlook.

• 25-75 employees: Managers emerge, teams specialize, and coordination becomes harder. Communication gets messier. Gaps in organizational design and process begin to slow things down.

• 75-150 employees: You’re out of the founder-only phase. If leadership isn’t aligned and culture isn’t clear or intentional, things begin to break.

• 150-300+ employees: At this stage, either your people systems support the business or they drag it down.

  
  

So, How Do You Scale Well, Not Just Fast?

You don’t need a massive HR/People team. However, a strategy and some frameworks are necessary. Having someone who’s been there can make a big difference.

That’s why I started Startup Talent & HR.

I collaborate with startups and growing companies to build the people side of the business before it becomes a bottleneck.

If you’re growing, going through a shift, or just unsure about your needs, I can help.

Identifying the Cracks

Not sure where the cracks are? That’s usually the first thing I assist teams with.

Reach out here, and I’ll let you know if it’s something I can fix quickly or if you just need gradual changes over time that can lead to significant improvements.

Most founders don’t intend to accumulate people debt. It simply occurs when growth surpasses your internal structure. I help teams catch it early and fix it before it escalates into something more significant.

Conclusion: Building a Strong People Foundation

Investing in your people strategy is not just an option; it’s a necessity. Startups often focus on growth, but neglecting the people aspect can lead to serious complications down the road.

As your company expands, remember that people debt is a real challenge waiting to happen. Awareness and proactive measures can help prevent these issues from hindering your success.

Whether through hiring better, clarifying roles, or solidifying your company culture, taking steps now will reap long-term benefits. Let's work together to create a robust foundation for your startup.