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Leadership At A Software Startup

1. Company Background
Phoenix Systems is now a leading software firm which develops financial software solutions in Pakistan. In 1998, David and Sohail both around their early fifties left their salaried jobs as senior consultants in a financial multinational and invested their entire savings to start their own software firm. The twenty employee firm was based in Karachi and had no financial backing; therefore, it was under stress to produce profits. The firm positioned itself as a high quality Automated Teller Machine (ATM) software provider. Sohail tapped on his previous employer and was able get the firm's first product deployed at two local banks at a competitive price. These revenues were able to sustain a breakeven point for the company within the first six months of its inception.
A firm with enormous growth opportunities
Software demand grew sharply as the entrepreneurs opened up the firm to Middle Eastern offers. The company started growing both in terms of number of employees and product lines. A natural ad-hoc divisional organizational structure surfaced. However, this growth came with a set of problems; very few software engineers knew ATM programming and those who learnt it from the entrepreneurs were unwilling to share it with new comers. They did not want to be replaceable and the organizational culture slummed, software quality fell, support costs increased and it became much harder for Phoenix to recruit quality employees most of which were programmers. There was no vision for newcomers.
Cultural Issues
Two kinds of programmers emerged, Support and Feature engineers. Support Engineers had ‘monotonous' jobs and had a very high turnover rate because they felt stuck in the same position while their friends in other firms experienced growth. Feature Engineers did the actual designing and were perceived slightly better growth opportunities. However, their seniors often hid core designs from them. The team leaders would very seldom network together...