The document discusses the key differences between startups and scaleups in their stages of funding, product-market fit, risk tolerance, employee roles, processes, management structures, and onboarding processes. It notes that startups focus on testing ideas and acquiring funding, while scaleups have proven business models and self-sufficient funding. Scaleups also have more defined roles, standardized processes, experienced corporate management, and formal onboarding procedures.

1. STAGES OF FUNDING
SINCE START-UPS AND SCALE UPS ARE AT DIFFERENT PHASES OF GROWTH, IT SHOULD NOT BE
SURPRISING THAT THEY WILL ALSO BE AT DIFFERENT PHASES OF FUNDING. MOSTLY, START-UPS
HAVE SEED FUNDING, SERIES A FUNDING OR SOMETIMES EVEN ZERO FUNDING. BUT THE TIME
WHEN A START-UP BEGINS ITS SECOND ROUND OF FUNDING, IT WILL MOST LIKELY PROGRESS
INTO A SCALE UP AND BECOME FINANCIALLY VIABLE TO AN EXTENT THROUGH SELF-
SUSTENANCE.
TO PUT IN SIMPLER WORDS, IF A COMPANY CAN PROVIDE INVESTORS WITH MORE AFFIRMATION
AND AN EXCELLENT MARKET OPPORTUNITY, THEN IT CAN BE COMFORTABLY BE CATEGORIZED
INTO A SCALE UP.

2. PRODUCT FIT IN THE
MARKET
THE MOST IMPORTANT DIFFERENCE BETWEEN START UPS AND SCALE UPS IS THE
PRODUCT – MARKET FIT. START UPS ARE IN THE IMMATURITY STAGE AND TESTING
THINGS LIKE PRODUCT FEATURES, CUSTOMER SEGMENTATION AND COSTS OF
CUSTOMER ACQUISITION. WHILE SCALE UPS HAVE ALREADY PROVED THAT THEIR
UNITS ARE ECONOMICALLY FEASIBLE.
TO STATE IN SIMPLE WORDS THESE ARE LIKE TWO STUDENTS. ONE HAS COME
UNPREPARED TO THE SCHOOL AND HAS NOT DONE HIS HOMEWORK. THIS IS THE
START UP KID. WHILE THE OTHER ONE HAS DONE HIS HOME AND HAS ALSO AT LEAST
READ THE CHAPTERS WHAT THE TEACHER IS GOING TO TEACH. THIS IS THE
SCALEUP KIND OF STARTUP.

3. RISK AVERSION
• This is the start up and this is the reason why start ups take chances, accept the dare and
could also take a step which might give them a leap. They are also eager to respond well and
immediately to the incoming feedback and ideas and this could be the reason why some start
ups turn into scale ups overnight.

4. MULTITASKING VS. SPECIFIC
ROLE
IN A STARTUP, IT IS VERY COMMON FOR TEAM MEMBERS TO PERFORM MULTIPLE
TASKS. AT THE TIME OF HIRING, THEY ARE SELECTED TO STICK TO A SPECIFIC SKILL
SET AND ARE ASSIGNED A PARTICULAR ROLE. BUT AS THE NEED ARISES, THEY ARE
ALSO EXPECTED TO TAKE ON OTHER CHALLENGES AND TASKS WHICH MIGHT BE
BEYOND THEIR SKILL-SET BUT ARE SUCH THAT THEY COULD ALSO PERFORM.
AS A STARTUP TRANSITIONS TO A SCALEUP, TEAM ROLES NARROW DOWN AND
THERE IS A SPECIFIC GUY OR GAL FOR A SPECIFIC TASK. THEREFORE, IT BECOMES
NECESSARY TO HIRE SPECIALIST FOR EACH AND EVERY ROLE AS SCALEUPS TRY TO
FOCUS ON EXPANDING THEIR GROWTH CURVE.

5. TRIAL & ERROR VS. SET PROCESS
• Startups usually have very malleable systems in place. The process of updating an
application, drafting an email marketing campaign or replying to customer emails look
different every time. The team members are also provided the freedom to try out different
methods till the time they find out what is the best method.
• Ultimately, they are also asked to make a proforma and enter it into the system so that can be
easily reused by for the purpose. As startups transform into scaleups, organized systems
become vital to complete projects on time and with maintaining quality.
•

6. CHANGES IN MANAGEMENT HIERARCHY
• The leadership required for a startup is completely different from a
scaleup. In simple words, more people you hire, the more people you
will have to direct. When there are more departments in an
organization, margin of error increases while shifting projects from
one department to the next.
• If you fail to overcome these challenges, you will have decreased
production and reduced turnover. For the same reason, scaleups
generally hire new leaders with experience of corporate management.
More the number of managers supervising metrics, quotas and
procedures, the more successful founders will be in taking the
company to greater levels.

7. PROCESS OF ONBOARDING
• Scaleups don’t expect new employees to immediately give their contribution on day one
without going through on-boarding process. In the case of startups, the founder of the
company might personally come and show the new hire his workplace and say, “Here is your
seat…Here are your objectives…Now start working!” But the approach changes completely
when team grows in a scaleup and reaches 50.