To Boost Efficiency, Rethink Company Culture

The Challenge: At 21, Siamak Taghaddos thought the hallmark of a successful company was having 200 employees and growing exponentially every year. But rapid growth and hiring in the early years of Grasshopper, the virtual phone system for small companies that he co-founded in 2003 with David Hauser, led to a ballooning payroll and a staff of employees who were a poor cultural fit. Ten years later, only a fraction of employees remain from the company’s start.

“At one point we had 65 employees and a huge payroll,” he says. “It was hurting our ability to grow our business and focus on marketing. We learned it was easy to go from $5 million in revenue to $10 million, but hard to go from $50 million to $100 million.”

Now, at 31, Taghaddos has a different view of success — an efficient operation with fewer, more specialized employees and less turnover. He’s getting closer to his goal. Grasshopper now has 40 employees and $20 million in revenue, and is aiming for 10 percent growth a year. The company serves about 140,000 clients, and expects to roll out its service to the United Kingdom this year.