Fred Wilson venture capitalist and Co-Founder Union Square Ventures
Once the product has been built, launched and achieved ‘product market fit’, “it is time to get more users or customers [as the company enters] the “building usage” phase.”
This means the team must now be built including more engineers to scale the product/service and more employees in product, customer support, marketing and business development, sales (if an enterprise/SAAS focus) and administration. Team size will at least double from building product’s stage with upwards of twenty when the building usage stage is exited.
Management issues herein: 1. managing engineering (where most of the headcount now is), i.e., recruiting, retaining and sometimes terminating engineers. “[The] right people [must work] on the right things, [teams must execute and] the right environment” must exist for engineering success.
“[Many] technical co-founders and lead engineers [don’t] enjoy managing.” Wilson suggests helping a lead engineer become a good manager or hiring “a VP Engineering who is a great manager and move [the] technical co-founder or lead engineer into a more technical role [ i.e., CTO or chief technology officer]”.
2. Founder/CEO’s challenge of navigating more direct reports. With potentially 10 + direct reports, a founder/CEO in management crisis can occur. Wilson suggests “find[ing] [team members with] management talent or inclination and invest in their ability to help  manage the team” while “building communication systems, business processes, feedback, and routines [to efficiently scale the business and team]. [He] suggest[s] that founder/CEOs [work] with coaches [to build management skills].”
While stage 1 (building product) focuses on individual contributors and stage 2 (building usage) continues as such, management becomes relevant at stage 2. “Strong individual contributors are often not natural managers”, presenting the CEO with challenges. Fred Wilson The Management Team - While Building Usage Jan. 9, 2012 ; http://www.avc.com/a_vc/2012/01/the-management-team-while-building-usage.html