Best Practices in HR
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Leigh Shevchik
  December 5, 2017

3 reasons you’ll fail at scaling

Scaling is an exciting time for startups. It’s when they really get to think about the future and balance between being scrappy and being strategic.

The possibilities are endless. But so are the challenges. Here are three common problems startups face on their path to scale.

Hiring the wrong people
When looking to scale the team, it’s essential to get the right talent hired and on the team quickly. This begins from the top down. Make sure you have people on your executive team who have dabbled in the startup world and had to learn from big failures. They’ve already made mistakes and know how to avoid them. Once you have your executive team in place, build out the rest of your team.

In the beginning, people with specific startup experience, who can jump in and own things quickly, are key to getting projects up and running smoothly. When you’re scaling, though, a common problem is hiring extremely scrappy, inexperienced people in the early stages of the company, and then failing to pad them with more experienced ones as the company grows. Your eager new grads may have gotten you where you are now, but when you get to the point where you need to get to the next level, you need people who are experienced in taking a company from point A (wherever your company is right now) to point B (the place the rest of you haven’t seen or experienced).

Assuming the customers you attract in the beginning are the ones you’ll have for life
Let’s say your startup has secured some early funding, because you’ve done a good job selling your market opportunity to your investors. And you’ve had some quick wins with prospects. A common mistake is assuming those early customers are indicative of the ones you’ll have later on.

Getting lucky with a few early customers doesn’t mean you know who really wants to buy your product. Knowing the full breakdown of your ideal customer profile will be key to adding the appropriate focus for marketing and sales, so they can develop messaging and target the right people. The sorts of things you need to make sure you know?

  • Industries your product is relevant to
  • Buying persona
  • Company size
  • Which other technologies they need to have to use your product (which CRM are they using?)

For us, we’d add propensity to buy SaaS and openness to cloud technology to the list. It’s different for everyone, but knowing these buyer attributes is critical.

Expecting success with no foundation
Startups clearly don’t succeed just because you want them to. You need to invest in creating a basic foundation. From the beginning, ask questions you want to answer in the future:

  • What is your recurring revenue?
  • Who are your target customers?
  • What is your cost per lead?
  • What is your average sales cycle?

Setting the right KPIs (key performance indicators) in each part of the business to measure growth is critical to scaling. It’s a fine balance between big, company-wide goals that don’t feel personal to a team member and specific, achievable goals that make an individual feel like he or she is contributing to the overall mission of the organization.

We hope this article helped guide you in the right direction to go forth and scale. Have advice of your own? Leave it in the comments below.