STARTUPS; SCALE WITH CONFIDENCE
March 13, 2020
STARTUPS & SCALING
Let’s set the scene, you run a startup in London, you’re scrolling through Instagram or Linkedin, you start to see posts from owners of huge startups, naturally, your mind begins to wonder “how did they do it? How can I grow (insert generic startup name here) so I can also flex on the gram”.
We’ve got you, we’ve put together some tips straight from the mouth of our MD Duncan. But is he a trustworthy source? Generally, no, however, he has a ton of experience in growing businesses and even ventured into the cryptocurrency world (que the “BITCONNNNNECCCT” guy).
So, the reason you came here, what is scaling and how should you best go about it? What are the challenges along the way? What can you do to give your startup the best start? Well, let’s get into it.
SCALING: THE KEY FACTORS
From our sit down with Duncan we were able to identify four key areas that were instrumental to his scaling experience. These were planning, recruitment, funding and something we categorised as the “not so fun stuff”, but more on that later
PLANNING FOR THE LONG-TERM
Let’s start off with planning, as the old saying goes “failure to prepare is preparing to fail”. Sounds super generic and sh*t, right? Well, it’s actually very true. Duncan said that the most important factor to scaling a startup is planning, you should try and plan as much as you can, in as much detail as you can. However, you have to be careful you don’t set your targets too high, you should try and be as sensible as possible and set clear KPI’s, this keeps you from over-promising and under-delivering to your investors. Another factor regarding planning, try and think as long-term as possible, Rome wasn’t built in a day, it takes time to build a successful business and you should plan for the long-term to avoid acting on the spot.
So which factors in particular should you plan for? Duncan recommends placing a large emphasis on funding, you need to know how much you’ll need and when. Although this can seem like a hugely daunting process, there are companies out there that can help you with this, or finding an experienced advisor should have the same outcome. Because at the end of the day, you can’t grow a business without money, and knowing when you need it is key, as it allows you to work backwards to achieve it.
Another factor which needs detailed planning is recruitment, you can’t scale a business without having the right staff. You can try, and you may succeed, but it’ll be way harder than it needs to be. You should be able to anticipate your recruitment needs if you have a decent understanding of your business model and industry. For instance, we build apps, we know that if we want to take on say 3 more large projects we’d need to take on perhaps 2 more developers. We’d measure our projection and recruitment leads by keeping an eye on our sales and seeing which projects will be starting soon.
And the last factor for planning is “churn”. So what exactly is churn? Churn is customer turnover. Let’s be real, as you grow, you’ll almost certainly encounter customers leaving you, or not purchasing your products anymore, it’s only normal. However, if it isn’t accounted for or planned/modelled, it can quickly escalate and start affecting your targets and overall business performance.
RECRUITING FOR GROWTH
When scaling a startup, you should recruit staff to fill voids in your knowledge, or to meet demand as mentioned in the planning section. Let’s say you’re a startup that’s got a killer idea, but you have no idea on how to get funding, grow a team or take it to the next level. Recruiting someone who’s got experience in doing this will do several things: accelerate your growth, make your startup more attractive to investors & help reduce any road bumps due to their experience.
FUNDING YOUR STARTUP
The topic of funding has already been covered, several times, so we’ll keep this short. You can’t do a great deal without getting your startup financed. You want to grow your sales? You need to invest in marketing. You want to expand the team so you can have a higher output? You need to invest in recruitment. Another factor to consider is that the world of business is becoming more competitive, therefore, levels are being raised. You have to have high quality products or services, websites, marketing materials, branding… everything should be high-quality, which requires investment! Does that last point sound interesting? Read more about it here.
THE NOT SO FUN STUFF
And finally, we’ve got to the not so fun stuff. When scaling your startup, you’ll undoubtedly encounter some difficult situations. So what’s the best way to approach them? Duncan said you should be as honest as possible, whether it’s addressing issues with your staff or informing investors of bad performance. This helps build trust and clarity, which will compound in the long-term.
Another factor that Duncan mentioned is that changes in business are to be expected, some good, some bad. The best way to approach them is to do so with confidence and belief in your decisions, so don’t second guess yourself!
Now, this wasn’t something which Duncan specifically mentioned. But admin will start to weigh you down, it’s best to try and develop processes which you can automate for as many aspects of your business as you can (don’t do this for things which require human interaction!). For example, we have our recruitment process nicely automated and we’re currently automating our sales process. This may seem pointless when you’re small and spending only a few hours a week on these tasks. But as you grow, it’ll require more time when you have less time to spare! Build it and they will come, as they say!
YOUR TIME TO SCALE!
Hopefully after reading this you’ve learnt something new or got your brain churning for ideas. Well, before you go, we’ve got one nugget of gold left. Below is our list of killer podcasts/books/motivation to get your startup in hyperdrive.
Also, if you’re looking to build an app related startup, take a read of our blog.
Fancy a listen? We recommend the the podcast “how to start a startup”
Fancy a read? We recommend “The Lean Startup”
Fancy some motivation? The “Y combinator” is a startup incubator with a brilliant site which has an awesome blog and some amazing free resources!