Many of the world's most prolific venture capitalists and startup founders agree that successful startups succeed because they're able to achieve what's commonly referred to as product-market fit. That is, an entrepreneur has identified (whether deliberately or serendipitously) a large market that is underserved in some way, and he or she has developed a product that effectively meets that market's need.
Being the first to deliver a viable solution for a market pain point is not a guarantee of success, though. In my own experience as the founder of a startup that went on to become one of the fastest-growing companies in the US, the product-market fit is just a starting point. The toughest challenges arise when it's time to scale a company.
From Pain Points to Growing Pains
If you're lucky enough to be in a position to scale your own company, you're in for a wild ride. Attracting, hiring, and retaining talented people who fit into your company's unique culture can be exhilarating and exhausting all at once, but it's one of the most important responsibilities you'll take on as you seek to build a sustainable business. The same thing goes for dealing with potential investors.
Other challenges are going to be decidedly less exhilarating and more exhausting. For instance, you'll likely be dealing with a lot more paperwork than you're used to.
There are a few key strategies you can adopt to ensure that scaling up doesn't become an insurmountable hurdle for you and your growing team. The following three worked for me (in some cases, I wish I had implemented them earlier) and for most other entrepreneurs I've known. These efforts to cut back and streamline could help you scale as well.
1. Eradicate unnecessary costs.
This one is first for a reason. Scaling up necessitates additional spending in a number of areas, and many startups rely on outside investments to fuel growth. Just remember that as you get bigger, so do your costs. Expenses that you may never have given much thought to can quickly balloon out of control.
Stuff like employee lunch reimbursements or printing costs (remember all that paperwork?) can burn through cash fast. The latter is actually a surprisingly common pitfall a lot of growing startups face, according to Pharos Systems International, an enterprise print solutions provider. To keep costs in check, secure all devices across your organization and communicate the benefits of workflow efficiency to combat what CEO Kevin Pickhardt describes as"a cavalier attitude toward printers -- a perception that office printing is free or close to it." His company has found that these measures can cut printing output -- and the associated costs -- by 40 percent.
2. Recognize when innovation is not the task at hand.
Innovators are an invaluable part of your team, but they're often not the best people to put in charge of scaling. The constant search for new ways of thinking and doing requires a heavy investment of time, energy, and -- eventually -- money. There will come a time when it's more practical to focus on maintaining what you've built rather than redesigning it or trying to dramatically improve it.
Similarly, when you outgrow the "startup" designation and reach a size that's on par with industry incumbents, differentiation will depend less on your product and more on the quality of customer service you provide. If you can make every customer feel like your first customer, even after you've served thousands, you'll be able to continue putting distance between your business and your competitors.
3. Keep your branding consistent.
Periods of rapid growth lead lots of founders to start thinking seriously about marketing, advertising, and branding. There's a good chance you've already achieved a decent amount of brand equity among consumers if you're in a position to scale up, and you want to preserve that. You also want to maintain a coherent brand internally, to keep an ever larger and more diverse workforce united.
You probably don't want to hire a bevy of new in-house designers at this point -- that's another potentially major cost that can be avoided. Growing companies can instead turn to design teams that specialize in helping startups establish and maintain brand identity in everything from investor pitch decks to internal communications collateral. After its series C funding round, for example, contract management software vendor Icertis reached out to SketchDeck, a professional design team, to improve the brand consistency of its marketing campaigns. Thanks to this partnership, Icertis was able to boost its lead generation significantly without the expense and distraction of building an internal branding team.
The life of a startup founder is never easy, but it's rarely boring. This is particularly true when you're growing fast. Hopefully, the strategies above will help you maintain some semblance of sanity as you attempt to turn your fledgling enterprise into a profitable, sustainable business.