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Jed's Top 10 Keys to Scaling
- 1. Jed’s 10 KeysTo Scaling Essential Guidance on Preparing to Scale Your Startup Jed Katz
- 3. Premise • You’ve eitherjust raised or are about to raise a round of growth capital • Your business has product/market fit and decent traction, but there are competitors • You have a great mgmt team, but are missing some senior leaders • Your projections are aggressive and everyone is expecting hyper growth • The laws of physics remain constant – There are are 24 hours in the day and 7 days a week – There is only one of you
- 4. How do Imove lightening fast, grab market share and win??!! (without blowing up in the process)
- 5. #1 - DefineWinning • What is it that will make the business scale? – Network effect? – Marketplace liquidity? – Brand building? – Locking up key accounts, distributors, channels? – Geographical expansion? – Employee virality? – Consumer happiness? – Is it a winner take all opportunity? • Discover your magic ingredient and focus on it – Examples – Peloton, Slack, Uber
- 6. #2 - GetReligion • Scaling is hard. Very hard. Dedicate you and your employees to it. • Make sure you’re ready and when you are, don’t look back. • Keep the strategy simple • Communicate the priorities very clearly • Increase your speed of learning • Be 100% honest with yourself and your team • Be very aware of your cash situation
- 7. #3 – AnA+ Team Is Crucial • Recruiting – It’s essential to fill in the team with A players • Long term intentions are crucial • Hire people you’ll delegate responsibility to • Hire people that are also good at recruiting • Apple’s rule • Founder time is extremely valuable – Delegate and trust! • Example – Production at MasterClass • Maintain and grow your company culture – Can be very difficult when adding lots of employees
- 8. #4 – ChooseInvestors Carefully • Simple fundraising approach – describe your “machine” in detail, and ask for fuel. – Add strategic value being created • Find active, helpful and supportive investors – Their network and guidance would be an unfair advantage – Make sure they are saving enough reserves • Improve the board dynamic – Re-energize existing board members – Avoid drama!
- 9. #5 - InvestIn Efficiency • Purchase and use the right automation tools – CRM – Marketing automation – HR services • Set up processes that can handle heavy volume – Encourage staff to find the bottlenecks – Constantly iterate • Be unemotional about tearing old processes down • Reward Employees for great ideas on the business and in the processes that run the business • Don’t let edge cases or customization crush you
- 10. #6 - AvoidDistraction • Focus on doing small number of things really well • Be very careful with incoming M&A interest – Senior management can lose focus and drive – Employees easily distracted by calculating their share • Avoid shiny objects! The bigger you get, the more random opportunities will present themselves – Be quick at prioritizing and saying no or not now • Stay focused on the core mission. Have a very high bar for new product lines or strategies.
- 11. #7 - ExplorePartnerships & Channels • Some work really well, some don’t • With partnerships, ask yourself… – Is it a poison pill? – Will it lead to faster growth? – What is the likelihood of distraction? • With Sales Channels, ask yourself... – Is my product a high priority to them? – Will they be really good at selling it? – How much hand holding will they need? • Examples: Docusign, Bonobos, Greensky
- 12. #8 - FindYour Tempo • “Be quick, but don’t hurry.” – John Wooden • Speed is crucial, but avoid chaos – Growing too fast can end up in disaster – Watch for burnout, product problems, cash burn • If a major pivot is necessary, make the call! – Example – Famous
- 13. #9 - StudyThe Data • Understand your unit economics! • Study, learn, iterate, adapt, fix, eliminate • Get rid of the bad, pour gas on the good • No Egos. Admit when something isn’t working – Often different tactics work at different stages • Example – Thumbtack and pricing
- 14. #10 - ManageCash Carefully • Hire a head of Finance (CFO or VP) sooner than you’d think • Only spend on what’s scaling. – But don’t be afraid to spend on what’s scaling! • Test with much smaller amounts • Long term fundraising plan
- 15. Some Final WordsOf Wisdom • You can’t get from A to Z in one step • Seize the moment • Get great mentors • You will very likely need to upgrade some of your management team along the way • Think big enough • If you achieve hyper growth, remember to take a breath along the way! Iterate. Don’t implode. • Good luck!
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