In the lexicon that accompanies technology firms, some words carry extra status.
“Disruptive” is one of them.
So is “scale”.
After all, a business that is scaling is a business that is growing.
Maybe even profit for the first time.
Good news all around.
However, there’s a side to scaling that doesn’t often get discussed.
And that’s how scale can show fail.
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Transitioning from one stage to another
It’s exciting to transform from start-up to scale-up.
But the transition can be tricky.
As you begin to scale, your systems will creak and this can cost you growth.
There are lessons to be learned from those who have trodden the scaling path before you. Don’t get me wrong, growing pains are par for the course and can often be portals for discovery.
However, not all mistakes are created equally. There are definitely some to be avoided at all costs.
The list below includes five mistakes to look out for.
Get your product-market fit right before you scale
Your business will no doubt reiterate itself many times in its lifetime.
However, before you scale you should have your product-market fit established.
One of the prime errors I see founding teams make is they embark on their scaling plans too quickly.
Signing up a handful of customers is an achievement and one to be acknowledged. What it isn’t is an indication that you’re ready to scale.
Here’s where we introduce another word from the scale-up playbook to explain why.
You need to prove that your product-market fit is “sustainable”.
Without consistent client sign-ups, your growth is not guaranteed. To say nothing of potential profitability.
How do you strategically conceptualize and implement marketing and business development plans without having a robust product-market fit?
Quite frankly, you don’t.
There’s a difference between scaling and becoming bigger.
Without a strong product-market fit, you are doing the latter. That’s cumbersome and will limit your growth.
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Become clear on what you will and won’t do
As exciting as scaling is, it also comes with a significant increase in decisions that have to be made.
Without being prepared for this, the overwhelm to make all of these decisions all the time can lead you to making some poor ones.
One of the ironies I witness in my role as a business transformation specialist, is the fact that it is often an abundance of opportunities that can be the challenge to manage. Rather than the opposite; scant opportunities.
The best way to mitigate for this challenge is to be laser-focused on your priorities.
Simply put, this means you are deliberately aware of what you will do, and equally, what you won’t.
This is most clearly illustrated in adding new features to your products (though it’s not the only example).
Once you’ve established product-market fit, it’s important to lead your industry doing one thing better than anyone else before building new products.
Here, your customers could lead you astray with the best of intentions. As you run focus groups, you’ll hear suggestions from your clients of new pieces of functionality that they’d love to have. These ideas could be gold dust for a later time. For now, don’t get distracted. Keep a note of the ideas and stick to your focus.
A great exercise to do is to create a succinct strategic plan.
Communicate this plan to your employees and get their buy-in. And, most of all, make sure you stick to it yourself.
Your whole team needs to be in alignment, with you at the helm. Weekly town hall meetings and daily huddles keep alignment front and center. If you have a remote workforce, these group activities become even more critical. (And they’re vital anyway.)
Even when your whole organization, of whatever size, is aligned, mistakes will happen. But they won’t derail your entire scale-up strategy.
Prioritize a recruitment process from day #1
Hiring more people is something that every scale-up requires.
However, I’ve seen companies firmly stepping into their growth phase still thinking like a start-up when it comes to how they hire.
This statement is not intended to be a mean comment. But I have seen many casual conversations lead to a recruitment offer being made by start-ups.
When you’re scaling, this is a recipe for disaster. (I’d caution start-ups against it too.)
Naturally, you’ll want to hire for competency and culture fit.
Without a recruitment process in place, more than a few bad hires will be made. Secondly, you will need to start from scratch each time you recruit a new person.
Staying lean is smart, but a recruitment process allows you to be efficient and effective each time you need to hire.
And remember that recruitment doesn’t end once an offer is made.
Don’t skimp on training and onboarding the new employee fully. This investment now will pay dividends later.
Build it… and let them know about it (marketing, in other words)
More than a few myths abound in tech land. And one of the most ubiquitous is how the product sells itself.
No, it doesn’t.
You need marketing to do that.
Now, marketing, as a business practice, is made up of countless activities and you won’t need to implement all of them.
But don’t kid yourself that referrals will do the job of growing your business organically for you.
Too often, scaling companies pull the trigger on a marketing strategy too late to gain traction among their ideal audiences. This penalizes growth and long-term sustainability.
Remember that the role of your marketing team is always to advocate on behalf of your customer. It’s this team who will be sitting on customer insights that have the power to transform your whole business.
To begin with, your marketing budget may be modest and your marketing team a party of one.
That’s fine; as long as you are bringing a strategic marketing focus to marry with your business plan you’re building a strong foundation.
From traditional advertising to content marketing to paid social media strategies, there’s a lot of tactics marketing can leverage to support your business growth.
Leveraging all of them is not necessary. Or even wise.
But marketing early on is.
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Understand that momentum requires architecture
When you scale your business, you need to scale everything else too. (Hence, my point about a recruitment process earlier.)
Nothing in your company will automatically scale as you grow, unless you have set up systems to make sure it does. This goes for your IT infrastructure, your procedures, your teams… and even your location (a remote workplace and/or an office).
Just think of the difference when you’re communicating company updates to a team of five people compared to a team of 50. Or a team of 150 (or more).
Yes, you might still use an email or a town hall over Zoom. But you’re going to have your work cut out for you to ensure no key message gets misunderstood or that important messages don’t get lost.
Managing this among a team of five is far easier than a team of 50.
This is where processes and infrastructure come into play.
And that’s just one element.
What about backup?
What about cybersecurity?
What about adding new teams?
Don’t grow in a vacuum; plan for it
Growth is exciting, but it doesn’t happen on its own.
The infrastructure of systems and processes you build is the foundation your growth needs to be sustainable.
Without it, your scale-up is doomed for mistakes that will cost its future.
Allan Boyle, founder, Saltwater Consulting