Recently, I had the pleasure of reading Elad Gil's High Growth Handbook. Gil is a serial entrepreneur, investor and advisor to companies like AirBnB, Pinterest, Square and Stripe. He was previously the VP of Corporate Strategy at Twitter.
The High Growth Handbook is a guide to scaling up a business and these five takeaways can help anyone who is currently growing their business:
1. Find the right Investors.
Most entrepreneurs know they need investors, but many don't consider that it's not just any investor you need, it's the right investors. Who are these mythical creatures? They are the people who are not just in it to get a return on their investment, but the people who actually believe in what you are doing and may also provide you with advice and other resources to help you succeed.
One of the main benefits of these types of investors is that they are more willing to wait out bad periods while the company is growing because they have more than just money invested. Money is the ultimate commodity to have, but it is better to have investors who will work with you through adversity.
2. Assemble your board wisely.
Having a board of directors can be both a blessing and a curse for new, fragile companies. A good board will steer the company in the right direction and provide valuable insight and recommendations.
However, a poorly formed board will do just the opposite, giving advice that doesn't match what the company needs. A board member who is used to working with large companies may not provide the best guidance for a small company, for example.
You may also require board members who do more than merely advise. Sometimes you need them to act more as consultants or even partners, helping you come up with survival strategies or helping out with more fundraising.
Lastly, a board that lacks diversity can hamper your company's ability to grow. If all your board members are similar to each other, they'll lack diverse viewpoints and may give your company tunnel vision.
3. Adapt to your swiftly changing business landscape.
If your company is growing fast, it will essentially be a different company every six to 12 months. You will have to adapt to running a virtually new operation once or twice per year and your team will have to adapt, as well. A three person operation that is fighting for name recognition is not the same as a 10 person company that is struggling to fill orders, but if your company grows rapidly enough, you might find yourself running those two very different enterprises in the same year.
Unlike a plant, your company will likely not grow in a predictable and steady manner. Rather, it will go through growth spurts, lulls, it may have to pivot and you may have to even curb growth if it's expanding beyond your capabilities to manage it.
4. Hire talent for the immediate future, not the long-term future.
We all know about the importance of hiring top talent for the future, but you should concentrate on the immediate needs of the company and not what you hope your company will grow into five or 10 years from now. Hire the talent you need for the next six to 12 months of growth -- 18 months at the most -- but not beyond that.
You don't want to hire someone who you think would make a superb VP of a 4,000 employee company to help run your current 40 employee company. The reason is simply because you don't have 4,000 employees and the person may not be suited to your immediate needs. Since your company grows in steps, it's better to hire talent that can help you make those little steps than trying to find people who you'll need at some far off point in the future.
5. Shift from product focus to distribution focus.
One of the best tips from the High Growth Handbook is for entrepreneurs to switch focus from products to distribution because as you grow, the latter actually becomes more important. If you can find a reliable way to make or import your products without sacrificing quality, then getting those products to customers is what you need to concentrate on.
Even if you have the best products in the world, if they take too long getting to the people and markets they need to get to, your company will fail. Distribution is one of the most important aspect of a business and one that is often overlooked by startups who can become obsessed with product quality.