Scaling Startups: The Next Stage in Your Business Growth
It’s a good problem to have. A great one, in fact. You took the massive step to start a business, and after all those late nights going over finances and redrafting your business plan, you finally get it off the ground.
You launch with a rubbish website but still, somehow, manage to acquire a few customers. You persuade someone to join the team and come on your crazy journey, acquire a few more customers, lose your best customer, PANIC for five minutes, then tell each other it’ll be fine. Things start to grow. You need to hire more people to keep pace but that needs money, so you start talking to VCs. Without really realising, you’re now part of something that actually looks like a proper business!
Things are going well, but don’t breathe a sigh of relief just yet...
The Next Stage
When you’re deep in the trenches of Startup Land, it’s easy to let the days, weeks, and months race by - how do you even know when you’re at the next level? It’s hard to step back sometimes and take a look at what you’ve created, so how do you pinpoint exactly when you’re at Stage 2?
“For us it was when we got to the point where not everyone knew each other’s names!” Carles Reina, VP of Operations at Tractable (previously at Uber and Santander), who took part in our Scaling Startups panel event last week.
Phil Burton, COO of Bloom & Wild, talked about one of the biggest shifts he experienced when the company went to the next stage:
“Time horizons. We went from planning one week to the next, without being able to see more than two months into the future - so planning for three years’ time is a whole new phenomenon for us!
“Plus, when it came to getting in the specialists. At the start we were all generalists - we could do a bit of everything, but not really masters at any one thing. When we started bringing in the specialists, that was another sign that we were raising the bar.”
There are so many new challenges to contend with, and one of the first things to ask yourself is: how to scale at a sensible pace? Scale too quickly and you risk running out of money, making mistakes and being unable to deliver on your promises. Scale too slowly and you miss opportunities, and may never reach your full potential.
The best leadership knows how to strike that balance, and, more often than not, it’s a gut instinct. You’ll know if things feel like they are moving too fast, just as you’ll know if there’s more room to push it forward. It is crucial for business leaders need to be aware of this though; timing is everything.
How to choose the right investors
Your investors can be like the bosses you thought you were getting away from; except tougher. They expect to see results and often won’t have any more to do with your business than getting the weekly numbers through. However, the best businesses need to choose their investors wisely. Like any business partnership, there has to be trust, a mutual respect, and a common belief - more than just the money they’re pumping into your business.
Carles Reina has been through his fair share of the fundraising rigamarole and had this to say:
“Once you’ve secured the investment, the pressure is really on. Before, when it was your own thing, it didn’t matter as much if you failed or slipped up. But now, you actually need to deliver, and deliver better.
“From an employee perspective too, we started conducting performance reviews and found that they were all expecting pay rises after the news had been announced (which is understandable). You want to keep them engaged and motivated, but at the same time you can’t burn through the cash either. What you have to do is make it clear to them what the business plans are, so they are part of that growth journey with you, and see what the goals are up ahead. There are perks other than money to offer your team such as benefits or perhaps equity options, the trick is finding that balance.”
Hire Your Tribe
Your team, your tribe, your crew - whatever you call them, there’s no arguing people make your company. Without a strong team, many businesses quickly fail. Scaling up undoubtedly means sticking to a rigorous hiring plan. In order to be successful, make smart hires at the right time. Poor hiring decisions mean you may not get the best people for your company, with disastrous results.
Office Manager at Mettrr, Gemma Walker, commented on her learnings after growing a team of 45 to over 300 in the space of a very, very fast-paced year:
“Culture fit is so important - and I don’t just mean that we all get on and like to play ping pong together (!), but when you’re bringing in new people, you have to question: do they share the core values?
“It’s also so important to keep the internal communications transparent. It does get harder and harder at every stage of your business, just because there are so many more people to control, but find ways to communicate clearly with every single person in the business, and let them know what is going on - they are part of your journey, too.”
Yannis Karagiannidis, Head of Growth at Monese, shared his best tips at the panel:
“Always keeping a step ahead, and remind yourself every so often of what else is happening in the outside world - always listen to the customer.”
Most importantly, remember: you got this ;)