These are my learnings about how to scale a business and what any entrepreneur should know to avoid or at least be aware of potential problems.

1. @CraigVodnik
7 Mistakes Scaling
Companies Make
Presented by Craig Vodnik

2. @CraigVodnik
Nuclear Engineering Degree

3. @CraigVodnik
Recovering Programmer

4. @CraigVodnik
Launched Chicago Tribune 1996

5. @CraigVodnik
Founded 2005

6. @CraigVodnik
HPA Member 2013

7. @CraigVodnik
About cleverbridge
● Founded in 2005 with 3 partners
● Headquartered in Cologne, Germany
● Bootstrapped with our own money
● No outside investors
● Profitable within 2 years
● 300 employees
● Chicago home at 350 N. Clark St.

8. @CraigVodnik
What is scaling?
May be hazardous to your health

9. @CraigVodnik
What does scaling mean to me?
Scaling is growing your business in alignment
with demand, resulting in a larger, stable
business.*
*More than revenue and people growth, with or without a hockey stick curve

10. @CraigVodnik
What are other’s definitions?
✓ A replicable system for delivering goods and services
allows businesses to increase their customer base
without having to increase their overhead at the same
pace.
x Scalable growth is all about pairing exponential revenue
growth with incrementally increasing costs.
http://www.inc.com/jason-albanese/how-to-scale-a-business-4-growth-tips-from-actual-experience.html

11. @CraigVodnik
Why not scale fast?
Scaling too quickly can kill you

12. @CraigVodnik

13. @CraigVodnik
GoodEggs Blog - Sept 2015
The single biggest mistake we made
was growing too quickly, to multiple
cities, before fully figuring out the
challenges of building an entirely new
food supply chain. We were motivated
by enthusiasm for our mission and
eagerness to bring Good Eggs to more
people. But the best of intentions were
not enough to overcome the complexity.

14. @CraigVodnik
HomeJoy Forbes Article - July 2015
“Looking back, it’s like, that didn’t
make sense — if your core business
doesn’t work here, why expand in
new markets?” said another former
employee. “I think they were sort of
fooling themselves with this exciting
top-line growth, and they had cash in
the bank so it wasn’t really a concern,
immediately, getting to profitability.”

15. @CraigVodnik
Premature Scaling Can Kill
Startups that scale
properly grow 20
times faster than
startups that scaled
prematurely.
TechCrunch article
2011

16. @CraigVodnik
Brad Feld on Premature Scaling
Hiring any substantive
number of sales or
marketing people before
there is customer
adoption is premature
scaling. All the early hires
should be technical or
product focused.Co-Founder Techstars

17. @CraigVodnik
My personal scaling
mistakes
Learned over 11 years

18. @CraigVodnik
Who should I hire?
College Grads
✓ Inexpensive
✓ Trainable
✓ Enthusiastic
○ Unfocused
○ Need mentor
○ Inexperienced
Experienced
✓ Knowledge
✓ Leadership
✓ Track Record
○ Has opinion
○ Career path
○ Expensive
Scaling requires hiring decisions for max 3 years out

19. @CraigVodnik
Perfect person wants to join my company!
Ability of Employee
✓ High performers hard to
find
✓ Want growth
opportunities
✓ Need to continue
challenging
Need of Company
✓ Align with growth
trajectory
✓ Salary 70% of costs
✓ Who’s in charge?
Scaling requires the right balance of ability & need

20. @CraigVodnik
Who should manage a team?
SME
✓ Gets hands dirty
✓ Task focused
✓ Owns/creates
information
✓ Leads by example
Manager
✓ Leader
✓ Mentor
✓ Connector
✓ People skills
✓ Professional
Scaling requires professional managers

21. @CraigVodnik
How much should I share with team?
Control
✓ In charge
✓ Makes decisions
✓ Clear accountability
✓ Top down approach
✓ Employee fear
Trust
✓ Owner, not driver
✓ Information flow bottom
up
✓ Executive fear
Can’t scale well without trust

22. @CraigVodnik
We’ve never done this before?!
✓ Decision making and implications
○ Adding an executive
○ Removing an executive
○ Organizational changes
○ Peers vs. Hierarchy
✓ Roles and Responsibilities
Scaling requires executive team growth

23. @CraigVodnik
Scaling Takeaways
1. Scaling not the same as growth
2. Scaling too quickly can kill you
3. Scaling begins with first hire
4. Scaling balances ability/need
5. Scaling requires professional managers
6. Scaling only lasts with trust
7. Scaling involves management self-reflection

24. @CraigVodnik

25. @CraigVodnik
Thank you!
Good luck scaling!