Scaling Smart: People Management for Rapid Growth with Nahed Khairallah

Imagine witnessing the meteoric rise and sudden fall of a seemingly unstoppable company, all. Because of people related issues. Imagine the emotional toll of shutting down a venture you've poured your heart and soul into, only to turn those experiences into the cornerstone of your greatest success.

What would you do if you faced such a crossroads in your entrepreneurial journey? How would you transform failure into a stepping stone for your future endeavors? In this episode, we sit down with Nahed Karela, the founder of Organized Chaos and an HR consultant extraordinaire who has navigated these very tumultuous waters and emerged with invaluable insights. Nahed's story isn't just about surviving failure. It's about thriving through IT and harnessing those lessons to empower others.

You'll hear about his first business venture at just 13, his pivot from IT to HR after a corporate document downfall, and the crucial lessons that he learned building and later shutting down a SaaS platform. Naheed will share how he embraced vulnerability and focused on strengths, paving the way for a thriving consulting business which has grown to seven figures in just four years.

He'll share actionable strategies on effective people management, scaling your team, and the common pitfalls to avoid in your entrepreneurial journey. As always, if you found value from this content, please like and subscribe. Hello everyone and welcome to another episode of the Beyond Fulfillment podcast. I'm your host, Dave Gulas, and this week my guest is the founder and host of Organized Chaos, Naheed Kurella. Welcome, Naheed. Thanks Dave. Happy to be here.

Yeah, happy you could take the time. So if you couldn't ahead, can you tell us how you became an entrepreneur? Yeah, it's a funny story. Has a lot of twists and turns, I think like most entrepreneurs, but I grew up in a family of entrepreneurs. Like from my grandparents down to my parents, they've all had some form of entrepreneurial venture. So I kind of grew up in that environment where the mindset was the no one will ever pay you your true value.

You got to probably do it yourself and chart your own territory. So I actually started my first venture at the age of 13 when I was still in school, just selling music, records and video games online, you know, at the start of the dot com era. So that was really my first venture. But I really, I really dove into it when after I graduated from grad school I got my first job in business development. I used to work in IT sales of all things. Um, and now I'm an hr.

You know, it's a bit big twist and turn But I decided to go the entrepreneurship route because my first job as, you know, business development manager at a, a small IT services organization, it was a company of around 50 people and they had product market fit. It was a company that was growing around 1 to 200% year over year, growing in terms of headcount finances that were great. And then they crashed and burned.

It was really mind boggling to me how such, you know, having all these ducks lined up and you know, everything looking promising for you would cause a company to really fall flat on its face. And when I looked deeper and, and sort of analyze the situation, it turned out that a lot of the issues were people related and I was sort of witness to a lot of them.

So it really got me very interested in that realm of hey, if, if a company can have all these things going for it and still it can find a way to shoot itself in the foot, especially on the people front, that's probably an area worth diving into because this is probably not the only company that's going through this. So I went down this rabbit hole of self teaching myself the world of human resources and everything around people and people decisions.

And I started volunteering for work as I was working full time and part time jobs here and there, started volunteering with, you know, startup accelerators, volunteering with, you know, doing pro bono work around HR just to apply my knowledge really that I was self learning. And over time, like in the two, three years, I had enough interest in my services and enough impact where I started my first venture in the HR field and really never looked back. And that was in 2011.

So that, that's pretty much, if you will, like in a, in a short form of how I really went into that whole entrepreneurship world. Okay, so out of college your first job is a sales position at an IT services firm. Company's doing well on the surface, everything looks great and then like you said, they crash and burn. And that had a profound impact on you and you really look deeper and you found it was people issues.

So then that just led you to research the HR functions, how people interact and you know, gain us skills and knowledge in that, in that field. And a couple years in, you start, you start a firm basically. Is it like a consulting firm for. Yeah, so, so the first thing I did is I started a company called Dynamic Recruit which focused specifically on the talent acquisition piece because that's the piece that I first really dove into.

And I started doing also, you know, some HR certifications and actual training and all that kind of stuff. So it was, and it was the easiest path to get into in the HR field, given that I was so in touch with the startup scene and a lot of startup companies, when you're talking incubators, accelerators and, and, and the like, companies that are scaling and growing and adding talent. So it, it was my.

It was for me from a business standpoint, the easiest entry into the entrepreneurship scene in the HR field. And then from there I went into consulting for the most part, but I started really with the talent acquisition part. Okay. And as you, you venture out on your own and you're growing that, that talent and acquisition piece, like what happened then?

Yeah, so basically a couple of years into the talent acquisition piece, I saw some gaps in really how people were doing recruitment and handling it, and I decided to really build a SaaS platform around managing HR processes and, and really doing job boards a little different than they were. I think it was very similar to how Glassdoor operates today, but not as well developed. This was back in 2013, if I'm not mistaken. So I spent some.

I spent a lot of the, the money I was making from the talent acquisition into that venture. And that is, I think, when I learned really the hard way some of the challenges of entrepreneurship and specifically scaling and growth and really what ended up happening. Two years into that venture, we had around 500 customers. It was a fully bootstrapped business. But I made the mistake of premature scaling.

Whereas I added more people than I needed to in the beginning, I dumped more money into the products, into features and things which were nice to have as opposed to essential. And essentially I bled the platform dry, really, in terms of cash, and had to shut it down. And then I focused specifically on the consulting edge and really tweaked how I do business, which we can get into if you'd like to in a bit. Sure, sure.

Okay. So like you said, new entrepreneur, things are going well, you're growing, you're scaling, and, you know, you made the mistake of scaling too quick, hiring more, you know, too many people, and then like you said, focusing on things that were nice to have versus essential and, you know, bled the company dry and had to shut it down. So having that experience and making that mistake and then going into the consulting world, like, how did you use the lessons from those to.

To. To grow your next venture? Yeah, I think it was it really when, when I was going through that whole experience of, you know, looking at my, my financials and seeing that red number grow and grow every month and, and just, you know, just going Going through the experience of making that conscious decision that you need to shut down that part of the business and focus on the things that you know are making you money and so forth.

It was a very difficult decision because I was spending most of my time on that venture anyways and just serves a background. I'm someone who studied information technology and management in grad school. So I'm someone who's very passionate about the tech scene and all that. So it was a pretty big blow not only to my, to my ego, but, you know, you go through an existential crisis sometimes in those situations, like, hey, am I really cut out for this whole thing?

But I think when I took a step back a little bit and reassessed the situation and also I spoke to a lot of people who I knew from my interactions and networking throughout the startup scene just to learn and just explain to them my situation and really show them what happened and really get some external insight, which I was really blind to because of the tunnel vision I was in.

And I was able to get a lot of, I would say, beneficial mentorship and advice from a lot of people who, who had been through something similar, who had gone through past it. And it helped me really from a consulting standpoint.

It's, you know, you, you would, I wouldn't think of it, I didn't think of it that way then, but it gave me such an edge because most consultants in my space, which I learned to discover afterwards, is that, you know, consultants in general haven't gone through the actual experience of doing the work themselves and going through that same path, especially when it comes to entrepreneurship startups, especially in the HR field of running their business, being the business owner and managing

everything that goes with the business and focus really only on the HR piece. So it was such a strong compliment to my skill set where I started going into engagements, interacting with business owners and speaking business language, as opposed to HR language, which most business owners really aren't very interested in if they can't really link it to how it benefits their business in general and the bottom line and so forth.

So it gave me such an edge and it really changed my mindset in terms of approaching consulting from, from a HR standpoint and just thinking business and how can HR actually help and enable the business to grow.

So I think that was such a big value add after that experience. Okay, so you can only connect the dots looking backwards, but it sounds like that even though that venture didn't work out, that whole experience of being an entrepreneur and having making those mistakes and having to shut down the company gave you such a big advantage in terms of selling the HR consulting to entrepreneurs because like you said, most other HR consultants hadn't had that, that type of experience. Yeah, exactly.

And, and actually it helped my consulting arm of the business explode in terms of growth and revenue. You know, that the, the consulting part of the business within four years grew to around seven figures, 15 people on the team. It just skyrocketed. And it was like one of those, you know, classic situations where you kind of crash and burn and you pick up the pieces and go up from there.

So again, you know, looking back, it was, it's, it's, it is the most profound experience I went through in my career, given that it was the failure, but it's the one I learned the most from even to this day. Like looking back, it's almost 15 years ago, but that is the moment in time, which I think was that big turning point which, which led me to that upward trajectory from there. Okay, and another thing you touched on that I just wanted to, to ask a follow up question.

So you said at the time when you had to shut the company down, right. You're having these internal challenges and your mind is basically saying, am I really cut out for this? And so many entrepreneurs deal with that, particularly when you're going through challenging times, dealing with obstacles and whatnot. Right. Dealing with just those negative thoughts that just attack you.

I mean, how did you get through it day to day when you're having to shut that company down and basically start over after that happened? Yeah, I mean, you go through a lot of ups and downs where I think every day, especially when you're not standing on solid ground in your venture yet, and you're still kind of trying to figure out, hey, is this going to work? Is it not going to work? Which I, which from experience over time I've seen that this is kind of really the status quo in a lot of cases.

But for me personally, it was really about refocusing on, okay, what am I good at versus what am I not good at and where do I need people's help and so forth. But also it was always good for me, especially towards the tail end of, you know, of my crash, so to speak, is interacting with the customers that were using my product and understanding, hey, what do you like about this? What has worked, what is not?

And as well as spending a lot of time with my team who was speaking to customers who are saying no to our product and really trying to identify, okay, what are we doing? Right. What are we doing wrong? And trying to understand between, you know, my just, you know, between me and myself is that where, what are the bad decisions I made and how could have these been better?

So I really took it as a learning opportunity, but at the same time it was really difficult day in and day out and really what, what my saving grace, I would say was really having opening up to feedback from other people from my team included, as well as people who are outside the organization.

Because I think when, when you allow yourself to be vulnerable and ask for really real feedback and people to ask just to give you the unfiltered truth of what's going well and what isn't, it can be a genuine learning moment and an aha moment. And that's really what would really help me get through that.

Even as the crash was happening, it was a low point for me, but given all the feedback I was getting from everyone and, and really understanding why this happened and, and making sense of it because I'm someone who's a very, you know, black and white logic driven individual, if it doesn't make sense to me, it'll probably never, you know, make sense. And that's how I went from there, to be honest. Okay. All right.

And something else too, I wanted to touch on where you, you talk a lot about this on like your LinkedIn posts and other content I've seen where you say not all experience is equal and you, you talk about the benefits of working in a startup environment versus like a large corporate company. Can you just expand on that and what you mean? Yeah, definitely that. That's a point that I'm very passionate about.

I think a lot of times companies in general, startups and others, we focus too much on the number of years of experience a person had. And you see, you see this. If you go to go onto any job or go onto LinkedIn right now, open up some random job posting, you're going to see things like minimum 5 years of experience, 7 years, 10 years. If you sit back and really think of that number, what is it really based on? What does 10 years of experience mean? What does three years mean?

It's the assumption that the longer you are in a job or in a career, the better you are at it. I have seen from my personal experience in working with more than 150 companies since I started my professional career, between consulting and FTE and all that is that that is not always the case. Because if you spend 10 years working in a job which is narrow, which doesn't have any growth in it, where your responsibilities have grown really in a very minor way over time.

It's very different than someone who built a business, spent two years growing it, and then, you know, moved into a full time job or something else. The breadth of experience and the breadth of things that you're doing and the exposure you have is much richer, much more diverse and it means they're a more well rounded business professional.

That's really what, what I, what I see in practice is when we focus too much on the number of years someone has, has been working or spent in a job, it doesn't necessarily mean that they are better or they have more experience. It's really about what did your experience entail? What were you doing during those years? What were the challenges you faced? What are the problems you solved? What are the decisions you had to make? What were the stakes that you were playing with?

These are all big, big difference makers. When, when you're evaluating someone's actual experience. And something I really advise founders on a lot is that don't look at how long they've been doing this. Think of what were they doing, what was the role in it and what was the impact and what were their learnings and so forth. What can they, can they bring that information and that learning into your organization? Attention Shopify sellers. Are you tired of slow sales?

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Okay. And being that your company is focused on HR and you work with so many founders and entrepreneurs specifically about, you know, transforming like their HR departments and the way they approach it. Let's just touch on HR for a moment. I mean, based on your experience, what do you see the biggest mistakes that entrepreneurs make with regards to hr? Yeah, I love that question. There's a few things that I see almost every time.

The first one I think that comes to mind is that founders making a decision regarding when to delegate some of their responsibilities to others in the organization. I think that's a big one. Because generally speaking founders, especially those who are first time founder, I see this mostly in first time founders.

First time founders, typically when they're growing their organization, especially if they have a business which is verging on success, once you hit that seven figure mark and you start hiring people and so forth, it's kind of like product market fits there. The finances are starting to come in. It becomes really more about the people and how you structure the work and how you deliver and how you scale from there. A lot of times I see founders hold onto things that they founded the company with.

Give you an example, let's say that, and I've seen this with. I'll give you an example of a company I worked with a couple of years ago where the founder was the person who was also a major player and contributor in the product development cycle of the organization, ends up hiring three other product designers, very well tenured folks and people with a lot of experience and a good track record and eventually had a very hard time letting them actually make any decisions around product.

Eventually he had to be the be all end all of product decisions. Those people really became just cogs in a wheel and he was really a decision maker. What it led to is really stagnation of growth and the company really plateaued at like the high end of seven figures.

And what happened at the time is that I made, I made a recommendation along after speaking to his team and so forth that hey, let's just try for six months you stepping away from the product piece and letting your team actually work on the next product iteration without your involvement. And you can imagine how hard that was for someone who had been so focused on it, but their next product ended up being a big hit and their best selling product.

So which, which is kind of interesting and not because the, the, the founder was not a good product designer. Their product designs led the company to that stage, but they weren't necessarily like having one person as a founder do all this with all the other responsibilities doesn't allow them to focus as much.

So mistake number one I see is founders trying to hold on to too much and try to funnel every decision through them as opposed to trusting the team they hired and are paying them to do the job that they're doing. So that's, that's a big one.

I see the, another one that I see as well is holding on to the same people that got you to where you are today and assuming they're the same people who are going to get you to the next milestone of your growth. So I also see this a lot with founders who generally grow or have co founders or startup leadership teams who are people made up of their immediate network, friends, college pals, people who really they have very close ties to.

And what, what ends up happening is that as they continue to grow and scale, they assume that hey, what got Us here will get us there. And a lot of times what I see is that this, the team specifically if it's a team that does not have that experience of scaling and growth. And it's also typically with first time founding teams, they assume that hey, it's going to be this way forever. We got to seven figures, we got to eight figures, hey, we're going to get to nine and 10 from here.

And then they, they forget because they just don't know at the time and they don't have the experience of, of going through it. Is that a company at 100 people is very different than what at 501 at 1000. There's different dynamics that go on, different sets of experiences and conditions that are needed to help you get through those hurdles and they end up stagnating themselves without, you know, any, any reason for it.

Like a company would have a lot of potential to grow, but they would be holding it back in terms of holding on to the people and giving them the decision making authority to, to do the things that they're not equipped to do at the stage that the company's in. These are, I see, I would say the biggest two that I see with, with first time founders specifically. And so they bring up an interesting point.

So how do you, when you're working with a founder and you see this, and oftentimes too with the founder, like you said, they got from zero to seven figures with a select team with a certain way of doing things. And so often we see the founders needing to be hands on with everything just to even get the company past those initial stages of growth. So how do you work with them?

When it see it sounds like such a 180 from what the founders used to, to basically evolve to that, that next level they need to operate at to, to grow from like seven to nine figures, let's say. Yeah, no, that's a great question. There's typically two ways I approach this. The first way is that every founder, which I found over the years of working with them, they're typically passionate about a specific area of their business.

And you know, most founders as and to your point, when they're growing their companies, the founder automatically becomes the de facto CEO. They go from focusing, let's say on the product element or the sales, you know, or the marketing or so forth, to, to pretty much having oversight over all of these things and assuming that they have to be the decision maker of all of these just because they are the CEO.

Basically the first thing I do to approach that is That I really have a, a OneToOne and try to deep dive into this. With founders within your business right now, with everything you're doing right, what are the areas that you are passionate about and you want to add value in versus the others, which you just have inherited and you just don't want to be doing, but you think you have to do.

I always hear something and typically it doesn't take founders very long to really be very clear about, hey, these are the things that I kind of want to spend the most time on versus the things which I am not super passionate about. And they usually end up being the things that align with their strengths and areas, which they just aren't really great at. So that's really the first step.

The second step is this needs to tangibly, I need to show them tangibly how what they're doing today is negatively impacting their business. Now, with, with that tangibility, what I tend to do is that this, you know, when you're doing this, this is not only the founder you're talking to, you're talking to the entire organization, interacting with them and doing some analysis in terms of financials, missed opportunities.

To go back to that example we gave about the product team and the founder who had three product people and just pretty much was doing everything on their own. Those are three product people that are experienced, are paid like experienced people, but are not doing the job that they were paid to do. They're actually doing the job of a college graduate, someone who has no experience, and they're being told what to do by the founder.

That on its own shows you that, hey, you're paying X amount of money for people with experience and you're not extracting that out of them. So just simple math on that one alone would, would just give a bit, a bit of an indication. But generally speaking, I like to do after we go through, hey, what do you want to do versus what you don't want to do, we talk about, okay, what does that look like from an organizational standpoint?

What would you need to do from a structure perspective, from the ways of working, from processes and so forth. And I try to work with them and map out what are the options and what are the cost benefit, what is the potential for, for cost savings, for potential growth based on the team and some data and some statistics to try and show them. Like in terms of black and white, why is this better for you?

And a lot of founders, typically they're looking at a few things, especially if they're, if they're, if they're venture backed. It's really about, okay, how does this impact my growth, how does this impact my revenue? And is this, allow me to scale? Those are really the three things that typically I try to answer with whatever it is I'm trying to propose and trying to get to the root cause of.

All right, and also you've started a podcast called Organized Chaos where, where you dive deep into a lot of different issues with regards to founders in hr. Can you just talk about what led you to start a podcast? Yeah. So Organized Chaos is really a passion project for me. Basically it made sense to start.

And this, this had been something I had been deliberating for over a year, I would say, and you know, Organized Chaos, the first episode I launched August of this year, but really I would say like 12 to 18 months before that. It was something growing up in my mind.

What really triggered me to start this venture is that I really picked up podcasting, I would say, a couple of years ago, as something I would do in my free time, especially during commuting and really dropping, you know, my kid off at daycare and so forth. I have a 20 minute drive each race. I'm like, yeah, it's, you know, that's an episode, you know, every day almost. And I'm someone who's really interested in business, hr, entrepreneurship. Those are really the topics I really dove into.

And the more I listened to podcasts, the more I started to realize that especially in my area, in my field, in my, you know, my area of expertise and the, and the types of businesses and things that I do. I noticed a lot of the advice that I was hearing from these podcasts with, it was either too high level to the point where it's not actionable.

If you're not someone who is hands deep into the HR function, you wouldn't be able to do anything with that information, which I think doesn't is really counterintuitive to even listening to a podcast. The second thing which I found is that there was a sizable number of, you know, a sizable amount of advice that I heard, which to me was like, no, this doesn't work. And this is wrong because I've seen it not work. And I, and I don't think this, this, this is good advice.

And I don't say this because I think my advice is better than other people know.

But when I looked at some of the podcasts that I was listening to, turns out the people who were giving advice in some cases didn't have experience in doing or implementing what they were preaching, which didn't sit very well with me because this is, this is some, this is a professional belief of mine is that when, when you want to be a consultant or an advisor or just give general advice to anyone that genuinely helps them, you need to have a certain level of experience and knowledge in it and

having tried it, and if you're not willing to try and do what you're preaching, there's something flawed there. So that's really what, what got me to start organized chaos. And for me, organized chaos. The whole mission behind it is that I want to help founders and early stage startups really go through a shortcut from where they are today to growth as opposed to going through a lot of the common people related mist that a lot of startups I've seen go through throughout their scaling journey.

And the reason I think that's important is because there's a lot of studies and statistics around why startups fail. And they typically fall under three buckets. Bucket number one is product market fit. And typically you'll find stats about like 35 to 50% of companies fail because of that. And it's almost half, half of the companies fail because of this. Because of course, obviously if you don't have product market fit, you're not going to gain traction.

Financial mismanagement and people management issues actually take up the second half of the reasons of why they fail and they're almost split, you know, down the middle. So imagine there's, you're looking at around 15 to 25% of companies, they fail because of their people management issues. So I thought that was really a sizable chunk of why startups fail.

And for me personally, I think if you have product market fit and you have the finances to grow, the people management issues should not hinder your company. It would be a tragedy for your company to fail because you mismanage your people when you had all the things, all the other things going for you. So that's really why organized chaos exists and really my mission with the podcast. Okay, so it sounds like what you're saying too, right?

Like product market fit, of course, is a must and clearly you have to manage your finances properly. Properly. But assuming you do those things right, there's no way that mismanaging people should prevent you from growing and scaling and succeeding as a company. Correct? Because if, if you're doing those first two things right, the people management really just becomes an enabler.

Like if you have product market fit and you have good finances, you have a success, you have a business which is successful right now and can be much more successful and sustainable in the future. So the people element is the enabler. It's that spark plug, I call it the rocket fuel of growth. And that's why I think it's such, it's so important because it accelerates you where you want to get to. It gets you faster to your destination in a well managed way.

It sounds too kind of like a sports analogy to where like winning cures everything. Right. So if you're, if you're succeeding with the product market fit and yet you have good financial structure, then right, you're going to be winning and thus it should make the, the people portion so much easier to deal with if you have the right systems in place. Yeah, and the interesting, also, the interesting thing also that I see, Dave, is that sometimes the people piece impacts the other two. Right.

Because if you don't have great people practices, let's say, hey, you need 20 people to grow and you end up hiring 50, you know, kind of like what I did in my venture, you are sort of mismanaging your finances through the people lens. If you don't have the right people, continuously building products that continue to have that market fit is also going to be a struggle. So they're kind of interlinked together. Right.

But definitely the product market fit is the most important one because if that is not there, then you're not going to be in a position where you're going to be thinking of people growth and people management and so forth.

But yeah, the people element, although a lot of times founders and other startup leaders think of it as the last piece and they only really go and look seriously at HR and people, you know, people operations so forth when they feel they need to, especially if they're expanding into other states, they need to hire a lot of people and so on. But it's such a foundational element to building a healthy business that is efficient and scalable. Yeah, absolutely.

Okay. And nahed, if people want to get in touch with you, learn more about your services or check out the podcast, what's the best way they can find you online? Yeah, so anyone is welcome to reach out to me on LinkedIn so you can find me there. You know my name, Nahad Karella will, will pop up immediately for the podcast. You can visit Organized Chaos. FYI, that is the website for the podcast and the newsletter that, that goes along with it.

And of course on, on any podcast platform that you use, Organized Chaos will pop up. And I'm always, you know, happy to, to engage and interface with, with the listeners and so forth. So, yeah, those are the ways that people can reach out to me. And, and I always welcome connections and interacting with folks who are looking to learn more and also need some help with, with their scaling and growth. All right. And we'll link all that in the show notes for everyone. All right.

Well, Nahed, thank you so much for taking the time to be here. Enjoyed our conversation, was very valuable for the audience. We certainly appreciate it. Thank you, Dave. It was a pleasure. And I look forward to future connections. All right. And that is all the time we have for now. We will see you next time.