Once you’ve gotten your startup up and running, it’s only natural for your thoughts to turn to growth.
To ensure lasting success and to achieve your long-term goals, you will want and need to scale your business.
But while growth brings a wide range of opportunities, it also brings a unique set of challenges. In fact, premature scaling is frequently cited as the leading contributor to startup failure.
If you’re not careful, your enthusiasm for scaling your business could actually derail your entrepreneurial dreams. This isn’t to say that you should view scaling with a doom-and-gloom outlook.
In addition to developing key skills, preparing to meet the following challenges head-on will ensure that your efforts lead to positive outcomes.
1. Hiring for new skill sets
In the early stages of a startup, it isn’t unusual to have a small group of people who are each handling a variety of tasks. You yourself could spend time on product development, marketing and sales and finances.
As you scale, however, you will eventually need to break your team into specific departments. Each person will have specialized tasks that they are responsible for. For example, instead of you and a few others each contributing part of your time to marketing, you will have an entire team that is solely focused on this task.
As such, you must be prepared to adjust your hiring procedures. Using the example of content marketing teams, marketing expert Sufjan Patel explains, “As your marketing initiatives grow, it may make sense for your company to move away from [generalists] and towards specialists in the specific content channels that you’ve deemed most valuable to your company.”
He also adds, “One of the best gifts you can give your new employees is a clearly-defined job description.” Specialization and clearly-defined roles will help new departments succeed.
2. An increased reliance on tech
As your company grows, so too will the mix of tech tools it uses each day.
This can affect both the software products you deliver to your customers (if you run a SaaS brand), as well as the programs you use to manage back-end tasks like customer relationship and supply chain management.
As Ashley Leonard, President and CEO of Cloud Management Suite, told me in a recent email, “Startups who scale need to make sure that IT doesn’t become a monkey wrench in their growth process. Too many programs where you need to enter data can invite human and software-related error and slow down your work, rather than speed it up. Success-minded entrepreneurs should embrace cloud solutions that help them automate tedious and time-consuming tasks like patch management, software distribution and so on.”
Planning for how you will incorporate tech will make it easier to use automation to streamline your work. This will give each team member more time to focus on more important efforts, while also reducing the potential for redundancies and errors.
3. Balancing sales and perfecting the product
One of the biggest pitfalls that occurs during the scaling process is when a company seeks to maximize sales growth before they perfect their product or even prove that there is long-term demand for what they have to offer.
Focus too heavily on sales, and you might lose track of who your target customers should be, or if there is sustainable demand for your product.
As growth hacking expert, Kevin Indig, explains, evaluating current retention metrics can go a long way in helping you evaluate product fit before you begin aggressive sales efforts. “You find the right engagement metric by looking at Core Product Value. Your product revolves around one or more core interactions that you should measure for engagement. For UBER, it’s completed rides. For Facebook, it would be making a certain number of friends.”
He continues, “Of course, there is an optimal set of input metrics you should look at. UBER doesn’t only look at completed rides but also hailed cabs or average ride rating. However, there’s one engagement metric that strongly correlates with retention. If that one goes up, everything else usually follows.”
By focusing on your retention metrics and learning more about what has contributed to your initial successes, you can fine-tune your product fit and marketing messages so that scaling of your sales team will lead to lasting results.
4. Maintaining flexibility
One of the biggest challenges that comes from scaling is finding the appropriate balance between establishing new procedures that streamline efficiency and maintaining the flexibility needed to continue to adapt your brand in the future.
Adaptability is crucial for ensuring that your brand can face the challenges and opportunities that will continue to come with changes in the marketplace.
ThirdLove cofounder and CEO, Heidi Zak, recommends striking a middle ground by “creating workable versions of big-company practices. Larger companies have established processes that work really well — about half the time. For the other half, those processes are time-consuming or even counterproductive. But you can use a lightweight version to accomplish a goal without slowing your team down.”
Streamlined, flexible processes will ensure that your team doesn’t get bogged down in endless meetings, while also helping you maintain the adaptive mindset needed for long-term success.
Scaling your startup isn’t necessarily easy — and as countless other businesses have proven, when done wrong it can actually destroy everything you’ve been working toward.
However, by accounting for these and other challenges associated with scaling your startup, you will be well positioned to achieve reliable growth.