My mentor once told me that you get to make two or three big mistakes as a startup. That's it. The margin for error is too small. Too many things need to align, and mistakes can take you out of position to benefit from alignment.
I've seen scaling efforts as a consultant and as a founder. At SkyBell, we started as a five-person team with $600,000 in crowdfunding from an Indiegogo campaign. We grew quickly, raising millions and partnering with some of the biggest companies in our space.
I've come to realize that there are a series of mistakes that entrepreneurs make when growing their businesses.
Here are common mistakes to avoid in the early stages of your business.
Hiring too quickly
After that initial win of funding or a big contract, the tendency is to ride that excitement and hire quickly. Unfortunately, this is what often leads early founders astray.
Scaling is a process, and doing it well is as much about avoiding mistakes as it is doing the right thing. Your priority should be hiring smart, not fast. A bad hire in this early time can affect everything from your culture to your growth trajectory.
Not solidifying your mission
Your mission is the lifeblood of your company and what holds it together as you scale. It's the reason your business exists, why customers buy your product, and why talented people forego big, stable paychecks to work for you. Author Simon Sinek says it perfectly: "People don't buy what you do, they buy why you do it."
Before you scale, know "why" you exist. If you need help, read Simon Sinek's book. If you don't have a lot of time, watch his TED talk. It's just as effective and requires only 15 minutes of your time.
Failing to lead as CEO
As a founding CEO, it's up to you to assess your strengths and weaknesses. Are you too product-focused? Can you attract talented people and investors with a vision?
It's okay to realize you're not perfect. No one is. It's not acceptable, however, to ignore your shortcomings and not grow into the best leader you can be. Ask co-founders and mentors for help in identifying and strengthening any areas where you need improvement.
Finally, lead by example. Try to act, think and behave how you want your employees to act, think and behave.
Looking outward instead of within
Many founders have a tendency to look outside their companies for new people and resources when scaling. Great founders look within.
Don't overlook the talent you already have in your company. Identify current talent that might be realigned or promoted, especially your earliest employees. They have the most passion and knowledge - and are battled-tested. That's hard to find.
Having an ambiguous organizational structure
In his book "The Hard Thing About Hard Things," venture capitalist Ben Horowitz highlights the importance of clear organizational structures. Similar to one of Ben's anecdotes, I've been close to a company that started with two CEOs. As they grew, that dynamic created confusion as the two CEO's tried to own the company's decision-making. It created divisiveness and ambiguity amongst the team. The company ultimately selected one person as CEO, immediately resolving those issues.
Make sure you create an organizational structure that is clearly defined and communicated to your leadership and team. Craft job descriptions with well-articulated responsibilities, reporting, and definitions of success.
Not emphasizing culture fit when hiring
It's easy to maintain a culture when your startup is comprised of fewer than 10 people who live and breathe your mission. Airbnb co-founder Brian Chesky wrote a company-wide letter that highlights how additional people and resources can challenge that tight knit culture when you scale.
Use the hiring process to maintain your culture. Evaluate the candidate based on cultural fit as much as the role itself.
Adjustments are key as you scale
Scaling can feel overwhelming when viewed as one big effort. Consider making smaller, incremental changes instead. This mantra has served me well: "Act, listen. Act, listen." Constantly assess how you're progressing toward your vision and expand or course-correct with discipline along the way.