The Best Organizational Structure for a Startup: Which One is the Best Fit for You? – Part 2

In the second part of this article, I will try to define some less-known or newly emerging organizational structures that might give startups and founders ideas about their own organizations.

Functional specialization

This type of organizational structure is an organization where one job function is designated to one person. The person in charge of this function will help carry out the work and can also assign another person to take care of similar tasks, allowing them to focus on the area that they are best at. For example, at a finance startup we have two functional experts, a finance manager and an analyst who handle both financial and strategic aspects. It’s often said that most startups don’t need more than one person who can handle their financial function. However, by putting a full-time analyst on the team, you could handle the financial aspects while a financial manager handles the strategic aspects.

The team-based organization structure

The most common structures that startups adopt are team-based ones. It is the best fit for startups that are still dependent on the founders for day-to-day management of the company. Teams are centralized and each team member is working towards a single goal which is the reason why startups find this type of structure highly suitable. What’s important to note here is that although these structures encourage autonomy, a lack of organizational structure can still impact the overall efficiency and success of your business. The hybrid organizational structure This type of organization is best for startups that do not want to lose all their autonomy.

Holacratic structures

One of the best organizational structures to have in a startup is the holacratic structure. In a holacratic structure, there is only one CEO and they do not have any managers reporting to them. However, they are empowered to put into action any strategy that they want to implement. Benefits of a holacratic structure are: Empowerment, direct accountability, motivation, clear communication, and the ability to make quick decisions. 

Although it is a bit cumbersome for a founder to manage all the tasks in the organization on their own, in reality, it is a good thing. In the long run, it allows for an individual to stay focused on the problems they want to solve and remain loyal to their company. Planner organization Another best option for the early-stage startup is to choose a planner-organization.

Network structures

There are two popular network structures: Active and passive. While a group of friends at a certain university can be classified as an active network, most of the startups belong to passive networks. Companies that already have an established reputation can fit into a passive network and startups trying to gain users and users’ attention are more likely to belong to an active network. The structure of the network has a lot to do with the type of activity and goals of the members. Active As the name suggests, the members of an active network are proactive. They regularly meet and talk about the product and share their expertise. The active network is made up of the founders and managers of the startup.

Process-based structure

Based on the ideal startup structure, process-based structure is the most commonly adopted one. This organizational structure describes how things get done in an organization. It’s similar to other organizations that are built around processes such as Apple and Volkswagen. But what makes this structure particularly unique is that it is more focused on “doing the right thing”. In my experience, most business owners get stuck in “doing the right thing” mode, which is one of the reasons why they find themselves struggling to get the startup moving. The ideal structure ensures that the team members know what they have to do and that they understand why they are doing it.


This post is by no means complete. I have a long list of things that I do not cover in this post. I urge readers to share their thoughts and experiences. I will add these ideas as well in future articles. I also encourage you to visit the Startup Organization Design Template that was made by Sam Stockton. This template is available for free on his website. It outlines the structure of many startups and can be used to set your startup’s organizational framework. If you have any questions, please leave them in the comments section below. If you want me to write more articles on organizational setup, let me know by leaving your email address below.