Best Startup Organizational Structure

A startup’s organizational structure is critical to its performance. This is especially true for the development team, which is a necessary component of any startup. A poor startup organizational structure can result in miscommunication, decreased efficiency, and workflow disruption. As a result, it is critical to invest time and effort into designing the most successful startup organizational structure ever. Below, we have outlined the preferred structure for a young and technological startup.

A Common Startup Organizational structure

There are two critical positions in a startup business: the Chief Executive Officer or founders and the Chief Technology Officer. These two important positions of a startup are located at the top of an organizational structure and are responsible for two distinct areas of responsibility. As a result, the development team has been divided into four mini-teams, each with its own set of responsibilities. Below, we’ll dissect each of these teams, startup positions, and titles in detail.

UX Team

A user experience team is a critical component of almost every startup. It is responsible for providing users with the best possible experience through intelligent and aesthetically pleasing design. Additionally, it collaborates with other mini-teams to accomplish the assigned tasks. The UX team in our proposed model will consist of the following startup team members:

• UX researcher

• UX designer

• Frontend developers

• Team leader

Specific individuals may be unfamiliar with the UX researcher position and may be unsure of what it entails or why it is essential. Successful examples such as Airbnb and Google demonstrate the critical role of UX research in ensuring a positive user experience and product performance. As a result, recruiting talented UX researchers will significantly contribute to the success of your startup. A customer experience researcher analyzes user behavior and offers valuable insights based on that behavior. These insights enable the rest of the UX team to create an efficient and successful user experience that users adore.

Backend Team

Almost everybody in the IT industry knows what a backend team is and what they do. This team is critical to software development as it is responsible for developing the application’s core logic and interacting with cloud providers. As well as interacting with the front-end through API Endpoints. The typical startup organizational structure for the backend team is as follows:

• Team lead

• Middle stack developers

• Backend engineers

The team lead is responsible for supervising backend developers and coordinating teamwork and workflow. Some readers may wonder why middle-stack developers were included. They significantly contribute to improving the relationship between the frontend and backend developers, as middle stack ones act as the missing link between the two. This enables both front-end and back-end developers to concentrate on their core tasks without thinking about the intermediate layer or API Endpoints, for example.

DevOps Team

The DevOps team’s primary role is cloud infrastructure management. They are accountable for adding new code to the repository before each new version’s deployment and thoroughly checking the new code. The DevOps team’s primary goals are to reduce marketing time and to provide an optimal user experience. Typically the DevOps team consists of the following team members:

• Team lead

• Cloud architect

• Site reliability engineer (SRE)

• System administrator

The lead is responsible for managing the DevOps team, allocating roles and responsibilities within the team, and overseeing the workflow. Cloud architects are in charge of developing and maintaining cloud technology. The SRE specialists ensure that applications and systems run smoothly and without interruption. The system administrator is accountable for managing and supporting the cloud.

QA Team

The quality assurance team is responsible for checking the application during its active development to ensure that it is free of bugs and errors and operates at a consistent and reliable level of operation. As such, it encompasses the following constituents:

• QA Lead

• QA Analyst

• Testers

The QA lead is responsible for managing and supervising the QA team. He or she establishes quality metrics and expectations for the product being built and ensures that they are met. The QA lead is responsible for ensuring that all questions are answered promptly. Other duties include developing research plans, scheduling, and assigning tasks.

The QA Analyst is responsible for developing, managing, and executing test plans for manual and automated testing. He or she creates the required documents during the testing process and designs unit tests. Finally, testers conduct and run checks. They review and evaluate system requirements, run test scripts, analyze the performance, and report to the analyst and quality assurance lead.

Types of startup organizational structures

Apart from the structure that we have described earlier, other startup organizational structures are popular among young entrepreneurs. So, let’s review the 5 major ones and see how they look.

Functional

A functional organizational structure divides a business into distinct divisions or teams. They are often organized around particular administrative roles, such as sales, marketing, information technology, finance, and human resources.

A well-functioning organizational structure like that can significantly improve performance and productivity. This is because the organization’s resources, such as personnel, expertise, skills, budget, and equipment, are organized around a particular purpose. The functional framework has the downside of adding layers of bureaucracy. It can stifle creativity by requiring approval from several people in command for adding new ideas or decisions.

Divisional

Divisional structure classifies teams or units into larger divisions. This is frequently achieved geographically or by product line. Leaders create separate business divisions for a specific product or service line in a product-based system, each with its manager. For instance, a clothing company might establish a product division for women, men, and children. Each of the three lines will have its marketing, distribution, design, and customer service teams. This is frequently preferable for product growth.

However, this method can result in decreased performance. With different design teams in each division, the cost of sourcing various fabrics and trims can increase. A more cohesive structure can result in cost savings due to negotiating for larger quantities of materials.

Geographic

Companies with geographically defined systems establish divisions according to the regions or countries they represent. For example, a business could find it more cost-effective to be located near a particular material source. This means that a regional arrangement makes more sense in terms of practicality and economics.

A disadvantage is that regional divisions tend to decentralize large businesses. Each location becomes self-contained and begins operating independently of the others. This can result in perplexing thought and strategy. A more unified brand front can fit the company’s needs and objectives better.

Matrix

The matrix structure, which resembles a grid, organizes a clear reporting line between workers and superiors. For instance, staff with similar skill sets may be assigned to distinct divisions or departments but collaborate on a single project. Employees can report to multiple supervisors as a result of this arrangement.

This startup organizational structure has the potential to become perplexing and complicated. Multiple lines of command will amplify the likelihood of conflict. At the same time, stability can breed drudgery over time, while its lack can breed anxiety and frustration.

Network

The network organizational structure is most often associated with businesses collaborating with other companies or outsourcing their activities to contractors and freelancers. It establishes a link between different locations and external or third-party entities.

Visually, it can resemble a functional structure. This strategy is most effective when the business depends on outsourcing or joint venture partners. The layout more closely represents current on- and off-site workflows and processes. It is not always the best option if your business employs a small number of freelancers or contractors or if development is carried out almost entirely in-house.

How to assemble your startup team?

Recruiting the ideal members for your startup organizational structure is not always straightforward. Essentially, you have three choices here:

• Local team

• Partial Outsourcing

• Full Outsourcing

Whichever choice is best for you is determined by your preferences, objectives, and unique circumstances. Let’s examine each of these alternatives in detail.

Local Team

One of the more traditional approaches is to hire a full-time team of local developers. At first glance, it seems to be the most rational choice, as you will retain complete control and handle the team quickly.

But, hiring full-time workers incurs extra expenses such as payroll taxes, employee insurance, and so forth. Additionally, keep in mind operating costs such as office space, supplies, and so on. Finally, all of these expenses will significantly increase your total costs. As a result, while an in-house team can be the optimal solution in many situations, it is almost always the most expensive choice for startups.

Partial Outsource

Combining an in-house team with partial outsourcing is a common choice for startups. Outsourcing is a process in which a startup chooses a specific area of their business where the outsource team will do their job. The latter performs all tasks, including project management. The startup merely specifies and requires technical specifications.

The other side of this scenario: a startup identifies unique full-time roles for recruiting remote workers. It engages a recruiting firm to locate and hire remote developers for the startup. The new remote hires become an integral part of the team but operate from the staffing company’s headquarters. The latter acts as the remote developers’ official employer and is responsible for all employee-related obligations, such as paying salaries, paying taxes, and offering various employee benefits. You can recruit several remote developers and organize them into dedicated development teams using this model.

Full Outsource

Finally, some entrepreneurs might wish to experiment with full outsourcing and abandon local production entirely. Another possibility is to employ a specialized software development team. Compared to partial staff recruitment, which involves hiring remote developers for a few key roles, a dedicated team will handle all development work. This team is almost similar to the local one, except that they are located overseas and operate at the staffing company’s headquarters. Typically, this model results in considerable cost savings and effective results.

In Conclusion

The proper startup organizational structure is critical to the success of every entrepreneur. Delegating roles correctly is essential to a startup, especially within the development team or any vital situation. Especially if you are new to the whole startup thing and just trying to get around your new business. Suppose you have already established your first startup organizational structure, but you don’t know the proper product development steps and accomplish them successfully. What happens then?

In that case, we can provide a direct specificity of your product development process. Over the past 10+ years, we have been involved in numerous startups and entrepreneurs that have been actively engaged in developing unique digital products. All of them have been successfully raised to a solid stage when they can efficiently labor productive results. How did they accomplish that with us? Everything has begun with our technological flow or, more precisely, with the Product Development Strategy Session. It is an accessible business consulting service where our experts will produce a general plan covering the future product development and the action plan with high-level features. Already got interested? Leave your project details below, and we will contact you in under 24 hours.