In a startup, it's common to call for all hands on deck. Non-technical staff jump in to stress test a new software build. Managers roll up their sleeves to set up and tear down for events. Software engineers carve out time to handle a sudden rush of customer support calls.

As CEO of a startup, I must have thanked people dozens -- hundreds! -- of times for being willing to step outside their immediate responsibility and just 'taking one for the team.' I was proud of our supportive and collaborative culture. It's part of the secret to success.

Until it's not.

Are we a "scaleup" yet?

In 2012, we felt we were on the verge of breaking out of startup mode and graduating to become a scaleup, with all our fundamentals right (product market fit, good ratio of customer acquisition cost to customer lifetime value). As a scaleup, we could simply drive more leads, hire more sales reps, and our growth would scale accordingly.

That year, we added a critical element -- email marketing workflow automation -- to our content management system. We were on an aggressive schedule, and hit almost all of our targets.

  • The development team churned out a strong product.
  • We reality-checked the software by using internally for several months.
  • Beta customers were extremely engaged and pleased.
  • Our marketing team prepared a big announcement and launch.
  • We hired heavily in sales in anticipation of high demand. 

Hey, so far, so good. This is my kind of story. There were green lights up and down our readiness checklist.

Oh, except for just one yellow light. Our support team was behind in staffing. But, support had never been problem area for us. We had healthy wait times of just 20-30 seconds, and good time-to-resolution for problem tickets.

We launched the product. It was a big hit with our customer base. First quarter sales exceeded expectations.

But there was one thing we didn't factor.

As customers rolled out new workflows, there was often a need for a hand-holding session over and above the initial onboarding. Our support professionals were all of a sudden spending long, long sessions with customers.

The more sessions they conducted, the longer the help line wait times started to grow, sometimes as long as 20 minutes. And what does a sensible customer do when that's just too long? They hang up, and call someone they know will answer -- their sales rep. 

True to our culture, the sales team readily stepped in to do some hand-holding to re-introduce the new feature set.

But, as good as the sales reps were, they were not support professionals. Customers, already frustrated from waiting in the support queue, did not come away with a five-star experience. We started to see really bad churn within the installed base.

And, guess what sales reps are not doing when they are busy throwing in alongside the support team? They're not selling! 

Our initial good news of robust sales made us start to look like the scaleup we had long been aiming for. But it led to downstream -- and then upstream -- problems, and our very startup-like response showed we still had work to do.

In a scaleup, almost everything has to go right, and all at the same time. Otherwise, your company is like a car with one wheel out of whack: It rattles and shakes, and causes otherwise functioning parts of the car also to break down. We had just one yellow light on our plan, and that was enough to pull everyone out of their lanes.

In startup mode, you're small enough to pull off the "everyone just pitch in" play. In scaleup mode, all parts of the company have to move in sync, or the wheels fly off.

Something will go wrong, so make the most of it.

In retrospect, we would have made support hiring a more urgent priority in the months ahead of the launch.

The opportunity, of course, is to make the most of that wrong.

This is part of the DNA of our executive team: Rather than just get through the problem and do our best to carry on, we talk about what happened in detail. On this occasion, we learned that we need to watch a whole set of headcount and support metrics, which we now review monthly. We also estimate the impact on Support of all new product releases.

It's impossible to foresee every bad scenario, and in the shift from startup to scaleup it can be any misaligned factor that becomes a drag on the entire operation.

But, once it happens, learn from it and put in the monitoring to assure it doesn't happen again.

Published on: Feb 26, 2018