The essential steps to scaling a startup
An adventure from startup to scale-up requires tremendous effort. Sometimes, founders see a period of quick growth to be the point where they have made it and are about to get a unicorn status, which is the Oscar equivalent for the startup industry. But the truth is, things don't always go as planned.
As reported by theStartup Genome, 74% of startups don’t succeed because of premature scaling. Paradoxically, failed startups often have a viable product and a huge number of loyal customers, but have trouble scaling in the right way. If teams don’t think one step ahead, a startup journey can turn into a nightmare.
Arriving at the right answers means asking yourself the right questions about scaling your business. That’s why, apart from the golden rule of avoiding the premature scaling death trap, you should consider the following:
- Where can I find a perfect team?
- How do I organize a work plan?
- Should I prepare the code in some way?
- How can I reduce unnecessary spending?
In this article, we address the above-mentioned points and uncover some key critical factors you should remember on the path to a successful scale-up.
You're growing, but are you scaling?
Essentially, there is a big difference between growing a business and scaling it. Growth means increasing the company’s revenue and its resources or costs at the same or a very similar pace.
On the other hand, in the scaling scenario, a startup increases revenue exponentially and resources incrementally, if at all. In other words, you reap maximum benefits from the minimum amount of money invested. A classic example of an outstanding scale-up is Google. Google managed to add customers rapidly and simultaneously invested few resources to maintain a service.
Let’s also consider Facebook. It has lots of applications such as Messenger, Ads Manager, Pages Manager, etc. This social network is a vivid example of scaling from a single product to a platform.
Is it a good time to scale up your startup?
Let’s discuss the nuts and bolts of scaling a startup.
It's not all black and white when it comes to deciding when to scale your business. There are some distinct signs your startup is fully ready to reach this highly important milestone.
Take some time to carefully decide whether you have achieved the goals that were set at the outset of the project. Moreover,bear in mind that it’s not enough for your startup to show overall profitability. Without a strong positive cash flow, you won’t be able to take your business to the next level.
Also, scaling up means leveraging software that can easily handle serious tasks and store a wealth of information to help you conquer the startup space.
So, if the checklist is completed, then it's high time to hurry and turn on scaleup mode.
Technical perspective: How to scale a startup the right way
Companies looking to get ahead of the curve should be aware that the startup ecosystem is the universe of multiple dimensions. As can be seen from the chart below, many factors have to be looked at before you can grow sustainably.
Today, we consider the scale-up question from a technical perspective.
Connect with peers
At early stages, don't hesitate to ask. It would be a good idea to contact other business owners who have been through this before. Also, there are special meetings for entrepreneurs looking to scale their businesses.
For example, Startup Scaleup is an annual event where “newbies” mingle with experienced founders through a multitude of workshops, networking sessions, and pitch presentations. This enables the startups to drastically increase reach and get into the world of scale-ups.
Invest in automation
Scaling is all about finding ways to perform the same tasks faster, more efficiently and at a lower cost. Thankfully, when "digitization of everything" became a reality, everyone was empowered to streamline the workflow with countless automation tools.
Customer relationship management (CRM) software such as Pipedrive, Salesforce, and Insightly assist you in organizing and storing data, since the more customers you have, the more issues may appear across the ever-increasing network.
Cloud computing also gives a great opportunity to meet the growing demands withlessexpenses. Furthermore, think of utilizing Enterprise Resource Planning systems. Such programs provide anytime, anywhere access to data, report about possible workflow changes, and enhance cooperation.