There's little in the working world that's more rewarding than taking your idea and turning into a company that's large enough to change the world. Scaling your startup is immensely rewarding to you as well as your customers, employees, and investors.
While the rewards are obvious, the risks of not scaling successfully are so high that only a small number of entrepreneurs can pull it off. Since 2011, I've interviewed hundreds of entrepreneurs and dozens of venture capitalists to uncover the secrets of these rare people who've turned their ideas into successful companies.
I've learned that such entrepreneurs do two things exceptionally well: they find customer pain that few other companies have even noticed and they delight customers with the products they build to relieve that pain. What's more, their products create so much demand that the founder needs to hire hundreds of people to keep up with it.
CEOs organize people into departments by function and hold them accountable for corporate goals. While such functional specialization boosts efficiency in each department, it could also motivate leaders of each function to gain more resources by taking them from other departments.
Unless CEOs create and manage processes to encourage departments to work together, the disadvantages of specialization can overwhelm the advantages. Simply put, leaders make the best use of their company's talent by first differentiating and then integrating.
And in order to scale their companies, CEOs must achieve corporate goals through four business processes.
1. Adding new customers
Every quarter the CEO sets goals for growth in the number of new customers. To achieve the goals, CEOs must encourage department to take action, as follows:
- Engineering develops products that make customers want to buy.
Marketing generates interest in the company and its products and siphons out all but the most interested prospective purchasers.
- Sales provides the most interested potential customers with a proof of concept and wins--hopefully many--of these competitive face-offs.
2. Increasing revenue per customer
Companies need to retain almost all their customers and encourage them to buy more. To do this, the CEO must coordinate three departments to do the following:
- Customer success calls new customers to evaluate how they are using the product--identifying which product functions they find useful, which are not, which don't work right, and which should be added.
- Engineering takes incorporates this feedback into new versions of the company's product.
- Sales contacts customers before their contract expires to encourage them to renew and to purchase the new products that company built in response to their feedback.
3. Hiring and motivating top talent
Rapidly growing companies must retain their best talent and hire new talent to tackle the challenge of sustaining rapid growth. To achieve this critical aim, CEOs must manage a process that anticipates the number of people the company will need to hire in each department based on the company's revenue growth goals.
Each department must work with human resources to identify, interview, and hire excellent candidates to fill these roles. At the same time, departments must assess their people, identify the top performers, and make sure they're motivated and paid enough to keep them happy at the company.
4. Scaling the culture globally
The CEO is unable to make all the business decisions in a global company. Scaling the culture is a way for the CEO to create an environment in which talented people can make those decisions in a way that's consistent with the company's values. To achieve these aims, CEOs must communicate regularly with the company's employees around the world.
More specifically, CEOs should
- Send weekly corporate emails from to share details of the company's operations.
- Require all employees of a global company founded, say, in France to speak English in all business communications.
- Hold quarterly all-hands meetings to celebrate employees who embody the company's values.
How well a leader manages these four processes can make the difference between startup success and failure.