Four of the five acknowledged universal core problems, based on Clement and Puranam’s (2020) theory, that organizations try to solve upon designing their organizational structure are (1) task division; (2) task allocation; (3) provision of information; (4) provision of rewards. These formed the analytical model for a study about how IT startups could design their organizational structure in their transition phase. The conclusion is that IT startups in their transition phase could benefit from having an organization structure with selective horizontal and vertical decentralization that enables clarity, transparency, and autonomy. An organizational structure with such decentralization uses mutual adjustment as the coordination mechanism, which is best suited for organizations with complex and dynamic environments such as IT startups in their transition phase. The purpose of this paper is to provide IT startups with insights on how they could design their organizational structure as they scale up in their transition phase.