On April 26, 2003, Scharffen Berger Chocolate Maker opened its second retail store in the newly renovated San Francisco Ferry Building, joining a number of other prestigious artisan food and specialty retail shops at this prime location. The opening of this second store took place in the midst of the company's rapid expansion. Scharffen Berger had recently raised $4 million in its second round of funding, and it had grown at an average rate of 60% over the past five years. As the first new chocolate-making company to open its doors in the United States in the past 50 years, Scharffen Berger had achieved unprecedented success in an industry dominated by a handful of large-scale producers. Since they first set up shop in 1996, the company's two founders--John Scharffenberger and Robert Steinberg--gained national attention for their high-quality chocolate produced with small-scale European artisan methods. Through their dedication to quality, Scharffen Berger became a media darling and an important player in the burgeoning gourmet chocolate industry. Maintaining its carefully developed reputation for quality while expanding production capabilities was likely to be a key issue for the company as it continued to grow.

Over the last seven years, the Stanford Project on Emerging Companies has tracked a large sample of high-technology start-ups in California's Silicon Valley. The project has examined how the founders of those enterprises approached key organizational and human resources challenges in the early days of building their companies and how it affected the evolution and performance of their ventures. This article summarizes the main findings of this research program. It describes five distinctive HR "blueprints" that high-tech founders embraced in launching their new firms. Those initial blueprints have had important impacts on a wide range of organizational outcomes, including growth in administrative overhead, labor turnover, and bottom-line performance. Moreover, companies that changed their HR blueprints have paid a heavy price in terms of higher turnover and diminished organizational performance. The results suggest that organization-building and high-commitment HR management "pay" and that changes in HR models are extremely destabilizing, even in the turbulent "built to flip" environment of Silicon Valley.