How to Successfully Scale
If you are considering trying a new venture or building on an
existing one, you may have questions about how quickly you
should grow to be sustainable but remain competitive.
Learn how to scale your
startup and you’ll be
putting yourself in position
In order to understand when and how to scale, first understand the
different phases of a startup.
Depending on who you ask, the phases of a startup have different
names, but represent essentially the same things.
The Phases of a Startup
Brainstorming – the phase where many ideas are generated and
evaluated for feasibility.
Development – the development phase can be divided into stages with
no revenues, revenues but no profit, and profit.
Growth – after turning a first profit, a startup can be in the growth phase
for months or years, depending on the growth rate and type of
The Phases of a Startup Cont.
Setback – after a period of experiencing growth, a startup is bound to
suffer one or more setbacks. These can be periods of declining revenue or
loss of key technical members.
Rejuvenation – setbacks can give way to additional growth in the
Transition/Pivot – the startup can undergo a transition in direction,
products and services offered, a change of ownership or buyout, or any
number of changes.
The Phases of a Startup Cont.
It has been said that the truest test of scaling is “replacing all
components of a car while driving it at 100 mph.”
If the car is still intact, you’ve got a scalable model.
If you do have the drive to scale your startup, you need to be prepared
to make some structural and/or management changes.
You may need leadership in specific areas to handle specific parts of
the business operations, whereas before it was just one person in the
As you steer away from early stage investors, you enter a period of
time where the focus of the effort is away from raising capital and
toward instituting robust processes and organizational evolution.
You will know you are starting to achieve scale when you start
attracting later stage investors organically.
Scaling Up Cont.
There are dangers of scaling your startup too quickly.
That car we talked about could fall apart at 100 mph.
But there are also dangers of going too slow and being too
After all, you wouldn’t get involved in a startup if there weren’t some
rapid movement, risk and exciting change happening!
When faced with the question of growth, you’ll undoubtedly be asking,
where should I invest my time? Where should I focus spending? How
do I know if I am growing at the right rate? Here are some good ways to
Focus on Operational Improvements – look for opportunities to make
minor adjustments to operations that will help keep growth strong.
Hire Strategically – you will never feel like you have all the resources
you need when you are going through the growth phase. Resist the urge
to hire up too fast. Instead, hire quality people for key positions.
Evaluate Risk/Reward – Take the most risk on those things that will
reap the most reward, while keeping a steady input on your bread and
Startup Scaling Challenges
The best planning in the world can’t prevent your startup from
experiencing growing pains. Just like in any relationship, expect to be
tested by the following types of problems:
A Day Late – schedule delays are common, and usually they’re more
than a day late. Ask what you can learn from problems with delivering
products on time — it probably points to larger personnel or technical
A Dollar Short – Cashflow will kill you at some point. Maybe you scaled
up too fast? Maybe you haven’t taken the time to secure additional
investors? Take stock and roll up your sleeves to fix the problem.
Market for the Product – all that market research couldn’t have been
wrong! Why aren’t you monetizing yet? Could be the market. Could be
that you haven’t pivoted. Or you misjudged growth potential and it’s time
to make some quick course corrections.
Scaling challenges come up at the worst possible times and
no startup is immune to them.
It’s how you deal with
scaling issues throughout
the course of time that
defines your success as an
Please contact us today to set up your FREE 30-minute consultation with
Shane Barker immediately!
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