The Best Team Structure for a Tech Startup

Most startup owners believe an organizational structure isn't essential for their business, but it's not true. A poor organizational structure leads to slow decision-making, lack of coordination among functions, complexity, and stress. It is one of the leading reasons behind startup failure.

Running a business is difficult without a proper administrative structure, especially for new businesses. However, many startup companies are unsure about their organizational structure and don't know which positions are critical for every tech startup.

This article discusses the importance of startup team structure and how you can build an ideal system for the remote development team of your startup.

Let’s get started!

Organizational structure is the hierarchy of the human resources in an organization who perform under the guidance of their seniors to achieve common business objectives. A well-defined tech startup team structure outlines the duties and responsibilities of every employee in the startup company structure and ensures smooth functioning.

It helps different departments to coordinate, exchange data, and work together to achieve business goals. A team structure also determines how information flows between various teams. A clear startup team structure is essential for the smooth functioning of every business.

Now that you have some idea of the organization structure, let's understand why it is essential for businesses, especially startups.

According to a study by McKinsey, companies with well-defined organizational structures are 2.7 times more likely to have streamlined business operations compared to those without clear structures.

Businesses can't run if there is no defined role for their employees. Organizational tech startup team structure help companies streamline business operations and ensure everyone is doing their job.

Business owners, managers, and other stakeholders are responsible for creating startup business structures and dividing different jobs & responsibilities into departments to complete various processes.

The success of a business depends on its decision-making process. A little delay can cost you dearly and damage your chances of being the early bird. Organizational structure is essential to improving business decision-making. The top management and executives make the business decisions, but other employees are also crucial.

The chief executive officer and other managers in the core management team often take feedback from the frontline employees involved in executing business operations. A startup team structure ensures a designated decision-making body that takes input from all the stakeholders and makes prompt decisions.

Employees play a crucial role in every business, and managing employees is essential for timely delivery. A tech startup organizational structure defines employees' jobs and designates managers who will be responsible for overseeing if the employees are performing their duties with integrity.

It also lets employees know whom to approach for help with their work. A startup team structure often has managers who are the first point of contact for the frontline employees and are accountable for overall employees' performance.

Gallup acknowledges that actively involved employees yield superior business results compared to their counterparts, irrespective of the industry, startup org chart scale, nationality, and prevailing economic conditions.

Customer service is critical for every business. As customers become more aware of their prominent standing, they want companies to deliver on their promises. Providing excellent customer service also helps business growth as satisfied customers will talk about their experience with other potential customers. It is no secret that tech startup team structure that offer efficient after-sale services stay ahead of their competitors.

Every business needs a dedicated team to address customers' queries and resolve their problems. A startup team structure ensures you have a customer service team that will resolve clients' issues at the first instance.

Every business has several departments that have to work in coordination to achieve business objectives. Sometimes companies fail to deliver the desired result, which can be because of the failure of one or multiple teams.

Evaluating team performance helps you understand which departments are lacking behind the predetermined benchmarks and need improvement. A startup team structure ensures each team has a specific function, and they have to do particular tasks, which helps to assess the team's performance.

Research by Towers Watson shows that companies with well-established communication channels within their organizational structures experience a 57% higher employee retention rate.

Communication between employees within and outside the team is essential for smooth business operations. A startup organizational structure establishes a communication channel between business owners, management, clients, and workers. Everyone knows whom to contact for specific requirements that promote a smoother flow of information.

A startup usually has limited members, but you need to scale up your team as the business grows.

Let's look at your team structure as you begin and when you hire more members at later stages.

As you launch your tech startup, you should have at least five members in the core management tech startup team structure. Let's know the position and understand its functions.

The CEO is an essential member of your startup, responsible for the organization's overall functioning, vision, and culture. Usually, it is general practice that the CEO is among the company's founding members, but some startups may hire outsiders as a CEO.

A CTO must be a part of the core tech startup team structure. This member specializes in technology and makes critical decisions related to technological development. If the founding members don't have a sound technical background, you should hire someone who is proficient with programming languages, software, hardware, mobile, and other technologies for your tech startup organizational structure.

A sales officer is the member who ensures sales growth targets are met and generates revenues for the business. This member oversees sales and devises new strategies to increase revenue. Hire a sales professional with excellent communication and negotiation skills and knowledge in closing sales leads successfully.

A startup company structure also needs someone to oversee the company’s marketing efforts. This member will concentrate on devising strategies to promote your products and services to your potential customers. Hiring a professional with outstanding marketing skills is crucial for the growth of your tech startup team structure. The person should be responsible for creating sales copy, executing ad campaigns, creating landing pages, and managing social media marketing.

Regulating all financial transactions is critical for any business, and you need a dynamic & competent CFO for the same. This position must be a part of your organizational structure. From income to expenditure, the CFO closely looks at every transaction and ensures there are no irregularities. Besides, the person manages cash flow and ensures the startup hierarchy structure has a healthy balance sheet.

Building the core team is common yet mandatory for every business. However, operational teams are as crucial and need precise attention when you start hiring. You need a tech team to manage the core business operation if you're a tech startup. The following teams must be a part of the tech startup organizational structure.

User experience is a critical part of every tech startup. These professionals create the best user experience through pleasing design and front-end development. The UX team should have the following startup team members:

• UX researcher
• UX designer
• Front-end developers
• Team lead

Each specialist has specific responsibilities. Many people may not be familiar with the UX researcher position. This member does UX research, analyzes user behavior, and provides valuable insights to help the UX designer create the designs and layouts, considering what the user desires. The designers collaborate with the front-end developers to build the user interface while the team leader supervises their work. You can have multiple people for every position depending on your requirements.

A back-end team is one of the elements of a startup organizational structure, and you must include them in the tech startup team structure. These technological professionals are responsible for the coding, building applications, and developing the app’s core logic for interacting with front-end users. A startup organizational structure for the back-end team is as follows:

• Back-end developers
• Middle stack developers
• Team lead

Back-end developers are the engineers who write code, improve algorithms, and create server-side logic. Many people may wonder why to include middle stack developers in the back-end team. These developers are responsible for integrating the front-end code with the back-end logic of the application. The team lead assigns the tasks to the developers and coordinates the work of the team members.

The primary goal of this team is to reduce marketing time. DevOps engineers are accountable for providing a flawless user experience and are involved in cloud infrastructure management. They oversee application infrastructure deployment and maintenance. Furthermore, they set up CI/CD pipelines, cloud migration, automation practices & tools, and support. Typically, a DevOps team consists of the following team members:

• Team leader
• Cloud architect
• SRE specialist
• System administrator

The team leader manages the DevOps team, assigns tasks, and oversees the workflow, whereas the cloud architect develops and manages cloud technology. The SRE specialist ensures the applications and systems run smoothly, and the system administrator is accountable for maintaining the cloud.

Managing quality is critical in the software development business. So, a quality assurance team is essential in your tech startup team. The team is responsible for testing the app and ensuring it is free of bugs and errors. A typical QA team includes:

• QA Lead
• QA Analyst
• Testers

The QA lead sets the indicators to maintain quality standards and ensures the team members adhere to them. These professionals determine the main strategies, assign tasks and manage the QA team.

The QA analyst is accountable for developing and executing test plans for testing an application. They design unit tests and create documents during the testing process. The testers conduct and run checks following the quality metrics. They also review system requirements to run the code, analyze the performance, and report findings to the quality assurance lead and quality analyst.

When you want to scale up, you will need to hire a business development manager who will work closely with the marketing team to devise a marketing strategy and a human resources team that will take care of hiring quality talent for your business. Besides, you will need a legal team to look into the legal matters as well.

So, here is the basic organizational structure for a tech startup. As for software development work, you can have an in-house development team or hire remote engineers. Nowadays, you can hire highly talented remote developers at an affordable price. Top talent sourcing platforms source highly skilled developers from around the globe. Turing is the market leader in sourcing top-quality software talent with a global talent pool of 3 million+ software developers. You can associate with Turing to build dedicated development teams or hire remote developers with a 2-week, risk-free trial.

Now let’s move on to understand how to find the right people and common mistakes to avoid.

Finding the right people to fill your startup team is a critical task that can greatly impact the success of your venture. The success of a startup often hinges on the expertise, passion, and dedication of its team members. To find the right individuals, startups have several options when it comes to team models.

Co-founders: Collaborating with co-founders who share your vision and complement your skills can be an excellent choice. Co-founders bring diverse perspectives, expertise, and can help shoulder the responsibilities of building a startup.

In-house team: Building an in-house team allows for close collaboration and a unified vision. Hiring full-time employees ensures they are dedicated to the success of the startup. You can hire individuals with specific skills, such as developers, designers, marketers, and operations specialists, based on your immediate needs.

Freelancers and contractors: Startups often have resource constraints, making it advantageous to engage freelancers and contractors. They provide specialized skills for short-term projects without the commitment of full-time employment. Platforms like Upwork and Freelancer can help connect you with talented professionals.

Remote team: With the rise of remote work, startups can tap into a global talent pool. Hiring remote employees allows for flexibility and cost savings. Communication and collaboration tools like Slack, Trello, and Zoom facilitate seamless remote teamwork.

Incubators and accelerators: Joining an incubator or accelerator program provides access to a network of experienced mentors and potential co-founders. These programs offer valuable guidance, resources, and connections to help your startup grow.

Ultimately, the right team model depends on your startup's needs, goals, and available resources. It's crucial to carefully evaluate each option and consider the specific skill sets, cultural fit, and commitment levels required since they are the best practices for building a startup team structure.

Every startup owner wants to be an established businessman someday, but many make mistakes that damage their chances.

Here are the five common mistakes first-time entrepreneurs must avoid.

Many new businessmen want everyone to use their products or services, but they end up producing something that does not suit anyone. Entrepreneur Michal Ugor says, "He who tries to please everybody, pleases nobody." So, try to focus on a particular segment and be specific about what product or services you want to offer in a tech startup team structure.

Business means competition. If you think you will launch a unique product and there is no one to challenge you, you might be wrong. You may have a competitor as soon as you market your product. So, keep an eye on your competitors, but don't be too obsessed with the competition. Focus on making your products unique and valuable to the users.

Every business owner wants to reduce hiring costs. It may appear beneficial, but you can't go along with inefficient employees. Avoid hiring candidates who lack skills and experience for your tech startup team structure.

Managing your finances is crucial for every startup owner. Whether it is rent, utilities, salaries, or other expenses, you need to spend a lot of money before you start generating revenues. Most first-time entrepreneurs barely have money to spend, which can affect the business operation. However, a few new business owners spend too much and run out of cash. So, managing your finances and planning expenses is essential for every startup.

Startup owners put their blood and sweat into their business and often get emotional about the idea. However, sometimes the idea may not work out well practically. Always be objective and stop involving emotion in your business. If some idea does not work, don’t waste your valuable time on it.

Building a tech startup team structure by assigning roles and duties is indispensable and essential for running new companies smoothly. It makes a huge difference in how a business works. When employees have a defined role, they can focus on their work and complete the projects on time which is crucial for any startup. Startup organizational structures can vary as the business grows; you may need a dedicated sales team, project team, and HR team. However, having a core management team is one of the best practices for building a startup team structure.

Building a strong tech startup team requires hiring talented software developers, but the demand for skilled technology professionals is high. Turing makes it easier to hire software developers. Join 900+ companies, including large-scale enterprises and fast-growing startups that trust Turing to build their dream engineering team.