In the beginning of a startup, especially one that has multiple co-Founders of equal stature, the command structure is exactly that of a hunting party. That is, members of the party do not have rigid roles although they each have distinct skills. Their lives center around well-defined hunting events, the success of each is important for their subsequent survival.
The decision making process tends to be ad hoc and each person can take on multiple and often overlapping roles which can change from event to event, depending on the need of the team and also their ability to perform that same role in a previous event. In other words, the command structure is very flat and communication between each member is direct and unambiguous. Most importantly, consensus is a requirement since everyone is equal and while there might be a leader, there cannot be a dictator. It is a democracy as well as a meritocracy.
An operating company is like a village which is led by a single leader who is not popularly elected but appointed by a group of elders, and has dictatorial power over the villagers. There is usually unspoken but well understood rules on what is proper conduct for each member of the village include the leader, the elders who are the ones that bestow the authority, the captains, the foot solders and all the other supporting personnel including the children that make the village livable and sustainable.
The command structure of the village is no longer flat. Decisions that are made at the top need to be propagated as well as diffused into the individuals. Consensus is less important and is replaced by consultation. Decisions are made by mandates and not through bartering among equals. In order to function, there has to be both punishment and rewards. Punishment of the non-performers is actually an important form of rewards for the performers. Most importantly, unlike a hunting party, the roles are much more well-defined and much more rigid.
It is very difficult for a hunting party to naturally evolve into a village. The requirement is for some of original hunters to give up their executive power to become non-executive elders and to elect a single leader to become an authoritative figure who can make unpopular decision for everyone to follow.
It is almost impossible for a startup with multiple equal co-Founders to grow beyond the original flat command structure because it is unnatural for anyone to give up power (or influence), especially if they were the ones who made the company successfully in the first place.
The hunters are individual contributors who at best can evolve into middle managers. But middle managers who are also major shareholders would have a hard time separating their ownership interest from their fiduciary responsibility.
It is a very interesting problem to solve.
--Denny--
Denny K Miu
http://www.startupforless.com