This is the true story of how one small startup, suddenly growing into a company - Wix.com, overcame its growing pains and turned itself from good to great, by cultivating creativity. And of how that company's internal solution spinned-off into a startup of its own - daPulse.com, now allowing other companies that are growing fast to maintain the startup spirit, speed and ease.
The management innovation in case (the internal solution turned startup) is a cross company collaboration and transparency tool unlike any other. A tool giving all users a bird's eye view of everything that is going on: from the company's roadmap to each team's execution.
It stands out in that it is uniquely fitting companies experiencing rapid growth.
Wix.com is a 34 million users company that revolutionized the web by enabling anyone to set up their professional Flash or HTML5 website, no coding or design needed. It was founded in Tel Aviv, Israel in 2006 and currently has over 450 employees in Israel, Brazil, New York and San Francisco.
The trigger for innovation in the Wix case was the absolute need to maintain its unique startup spirit and company culture as it was growing, knowing full well that spirit was a crucial part of their innovative DNA. You see, Wix.com was always a maverick; it reinvented itself twice in face of a changing market, once from a flash based tool to an HTML based tool and the second time from a web only service to a cross-platform service enabling users to create web sites that perform perfectly on mobile too.
It also happens to be one of those companies sure to make it to the Best Companies to Work For list one day: it has a bring your dog to work policy, it throws huge bi-annual parties for its workers and their partners, it offers a free (!) Manhattan based co-working space in the heart of Silicon Alley called WIX Lounge, it holds open to all competitions for web designers and coders and it turned down a generous exit proposition, determined to prefer growth over a quick win. It is now on its path to an IPO – the first company in its field to do so.
This company culture was something Wix was determined to preserve then, but as it was quickly growing from a 45 employee startup in Tel Aviv, Israel to a 450 employee company in 4 locations, including New York and San Francisco – this was getting harder to do.
As the company grew, things started to get more complex, and Wix started suffering from all sorts of growing pains, like losing the ease and transparency of its communication and mounting coordination problems.
In his ever relevant bestselling Good to Great, Jim Collins described why only "a few startups become great companies". According to Collins, this is in large due to the "wrong way" in which they respond to "growth and success". In a paragraph that's been resonating strongly with founders and investors alike for years, Collins described the entrepreneurial death spiral:
"Entrepreneurial success is fueled by creativity, imagination, bold moves into uncharted waters and visionary zeal. As a company grows and becomes more complex, it begins to trip over its own success – too many new people, too many new customers, too many new orders, too many new products. What was once fun becomes an unwieldy ball of disorganized stuff".
Collins goes on to describe how problems start to surface on all fronts, and how professional MBA's are hired to turn the new chaos into order, transforming the egalitarian environment into hierarchy and introducing processes, procedures and checklists. He describes how the new order kills the creativity, burying it under heaps of forms to be filled and meetings to be held, making the most innovative people flee.
"The exciting start-up transforms into just another company, with nothing special to recommend it". From there, it's all downhill.
Keeping it Real
Wix founders knew they wanted to avoid that fate. They wanted to continue doing things their own way. Up to that moment, for example, when a new employee came on board, they were handed the company's credit card and sent to buy their own computer and keyboard of choice, no forms to fill no guidelines to abide by.
When the company moved to its new Tel Aviv seaside offices, no offices were placed along the wall overlooking the sea; that view was for everyone. Wix wanted to maintain the spirit of a flat easy going company as it was growing and it was trying to figure out how.
These were the steps taken by Wix co-founder and CEO Avishai Abrahami :
Step 1: Recognizing there could be a problem. Simply understanding, that the company's growth came with a new set of growing hurdles.
Step 2: Recognizing what the problem looks like. Abrahami pinpointed the manifestations of the problem; like seeing too much time in meetings was spent on updating about the past with only little time left to discuss the future, or employees not knowing what the person in the next room is doing.
Step 3: Looking for solutions: Abrahami started looking for existing communication tools to solve these problems and tested them one by one.
Step 4: Sharing the problem with others. Abrahami shared his thoughts with full transparency with team members he trusted to be creative thinkers. One of those was Roy Man, a serial entrepreneur.
Step 5: Giving way to creativity and intrapreneurship. Abrahami allowed Man to stop all his other tasks and focus on coming up with a perfect solution to the company's new communication, sync, transparency and management needs.
Step 6: Embracing intrapreneurship. Man came up with a tailor made solution he named daPulse. On the way he was given all the feedback he needed to create this cross company communication platform, and when it was done, Wix adopted it and started using it.
7. If you want to keep something precious, set it free. As daPulse grew better and better in supplying Wix with exactly what it needed - a transparent real-time cross company communication solution that was eliminating knowledge gaps and seamlessly syncing remote teams - it became apparent that daPulse was on to something big enough to justify becoming a startup on its own.
Wix was the first to encourage this move, and daPulse, that started inside Wix in 2010 went on its independent way in 2012 with Wix as first customer and its inspiration on how a company can grow fast and maintain speed and ease through constructed transparency - the service that daPulse gives hundreds of other companies today.
The one big challenge that had to be overcome by Wix after receiving the daPulse solution, was getting employees to use it. This is actually still the challenge every new daPulse customer faces when starting to use the solution, which brings relief and results only if used by many.
This hurdle was overcome by leadership. Abrahami was his own company's agent of change, as he simply demanded that everyone uses the tool. Once they did, they quickly started enjoying its fruits - from recognition on their own work to a dramatic drop in time spent on searching through emails, conference calls and writing lengthy update summaries.
For Wix it was maintaining the innovative company culture, characterized by transparency, speed and sync, as it grew.
Other daPulse customers report a dramatic reduction in their company's use of emails, conference calls and updates in meetings and achieving a bird's eye view of everything that is going on in the company.
They speak of aligning teams "With daPulse, all our 450 employees know where we're heading and zero time is wasted on updates" Avishai Abrahami, CEO & Co-Founder, WIX.com
Of complete sync "As an international team, dapulse helps us overcome communication barriers such as timezones and locations. daPulse makes sure everyone is a part of the conversation at all times" Sharon Yaffe, NBC Universal
Of transparency "Information that wasn't being shared in the past has surfaced and communicated through daPulse, leading to better information flow." Guy Yeshua Director of M&A Matomy
And of Eliminating knowledge gaps: "We can finally keep track of our information, organization-wide." Alon Bloch, CEO My Supermarket
The two most important lessons are
1. Encourage and embrace inner innovation. Remembering people are your most valuable asset and allow them to be creative at work – everyone will benefit.
2. Startups are a state of mind, not a phase. A huge company can still be a startup. The term should really be used to describe a modus operandi, not a phase in a company's life. This is why in his Lean Startup, Eric Ries makes a point of showing that the method is implemented with the same level of success by governments as it is by a 3 people project in a garage.
Wix.com co-founder and CEO Avishai Abrahami and the daPulse.com founding team