Steps to scale a startup should only be taken after the startup has the right team, the suitable business model, product-market fit and traction. Scaling before you have those things in place can put your company in danger. According to the Startup Genome Report, 74% of high-growth internet startups fail due to premature scaling.
Therefore, you must have those ingredients in place before you take steps to commence scaling. Read this article on the steps to scale.
Delegating
During the startup phase, founders usually roll up their sleeves and get involved in all areas of the company and become ‘good’ at doing lots of tasks. I think some founders get addicted to the chaos and ‘hustling’ of the early stages.
However, founders need to step back and trust their team to become experts and empower them. For this reason, founders must delegate responsibility to responsible and effective managers who monitor staff, KPIs and other company metrics.
The managers are responsible for maintaining the standards created in the pre-scaling stages. Great entrepreneurs must fuel the creative genius within the company and continue to innovate, lead and inspire. If you are a founder, stay in this zone.
Build a Successful Board
Given the available support, Australian startup founders have every right to be excited about their prospects of succeeding. From Government grants, tax incentives & concessions to accelerators, mentoring and growing investor confidence.
The world is noticing that Australia is fast becoming a haven for leading tech talent. This should come as little surprise, given Australia’s historical reputation for producing some of the top innovators and inventors in science, engineering and robotics.
Given the talent level that can be found Downunder, everything looks rosy, right? Well – sort of. While Australia’s innovation, research and development may be charging ahead, some say one area Australian founders can improve upon is company management. Particularly when establishing and managing company boards.
Having the right company board is integral to a startup’s success. Typically, 2 or 3 founders are on the board in a startup’s infancy by default. However, once the startup starts gaining traction in the market, it requires the expertise of an experienced board.
The board plays a critical role in your company’s development. Problems with company boards can have catastrophic consequences. To make matters worse, board problems usually become apparent at the worst possible time – before scaling.
A recent KPMG study, “The Startup Board Report,” spearheaded by Amanda Price of KPMG Australia along with co-founders of Think & Grow – Anthony Sochan and Jonathan Jeffries, revealed only 55% of Australian startups would choose the same board again if they went back to Time. The report also found that 92% of startups said they have board members who are external investors. This data arguably indicates that Australian startup entrepreneurs are willing to sell their seats on the board – and later regret it. Yet another contributing factor to poor board selection is 65% of startups that were questioned, do not have a formal recruitment process for board members.
When ‘hiring’ for board positions, the key is to leverage skills, experience and connections. Treat the board hiring process in a similar way that you would when hiring key employees. You must look at the value that board members can provide.
Board members must complement one another. It is not just the skills and experience you should look for in a board member. You also need board members who have deep connections in your industry and can assist in forming strategic partnerships, advise on employing the right team members and advise on strategy.
Instead of accepting just anyone onto your board, write down a list of what you want in a board member and then take it to the next step: identify ideal candidates, pick up the phone, have a lunch meeting, and share your vision with them. You never know, if it does not work out with the person you target, they may recommend someone better suited. Do your homework before appointing anyone to your board, and work on building relationships early in your startup.
The Important Aspects
As I am sure you are very well aware, each startup is unique, and it is vitally essential for you to get the right advice on your board as early as possible. This is where many startups get it wrong initially, often leaving them locked into inefficient or dysfunctional boards.
There are several factors to look for in board members. You may wish to hire a particular director for her experience in your industry. This director may have the market knowledge to guide your startup to achieve product-market fit. You may wish to choose another director for her connections in your industry to leading talent and can make significant progress in hiring key management or technical staff.
When seeking board members, it pays to be strategic. When considering potential directors’ backgrounds, experience and professional networks, assess how these attributes align with your startup’s goals.
Remember, relationships take Time – founders regularly underestimate the time it takes to form their board. Before hiring for a board position, many founders and board members have known each other for several years.
There may be many great people that you will likely meet in your quest to find the right directors. While your connection with those you meet is meaningful, you must ensure candidates meet the criteria on your wish list. If you are a director, you must make proper decisions for the company’s and its shareholders’ benefit.
Start reaching out to potential board members as early as possible. When you are unknown, emailing a potential director asking for a small piece of advice is far easier than arranging a pitch for an investment round. Build the relationship step-by-step and allow people to get to know you, your team and your company’s vision, capabilities and achievements.
You will likely need to speak to many people, buy lunches, and attend many events. Be relaxed in your approach; do not be too eager.
Develop Strategic Partners
Tapping into an established customer base can accelerate growth incredibly well. The name strategic partnership is not a mistake. It would be best if you used many strategies (and creativity) to find the right partnership, and your brand values must align— for example, Nike and Apple partnered by cobranding Apple’s new sports watch. I cannot think of a better example of a strategic partnership than that.
Nike and Apple’s brands fit perfectly together, as they reinforce each other’s brand of being young, innovative and healthy. His powerful combination resonates powerfully with a vast audience.
More recently, another solid strategic partnership was formed between Spotify and Samsung. These two giants joined forces to provide deeper integration of Spotify into Samsung phones, significantly improving the user experience.
There are many other examples of successful strategic partnerships. If you want to use a strategic partnership, you need to understand your company’s value that it can bring to the partnership. You also must be clear on the value that you want in return. Most importantly, research how that value will benefit both parties’ customers.
Explore New Markets
You need to think about two things. Do you want to expand your product or services to new markets in your country, or do you want to expand the same product or service into other regions? Perhaps you would like to do both.
Sometimes, it is great to have a home-court advantage. For instance, when the international eCommerce giant Amazon moved into Singapore. t faced massive competition from Lazada – an epic stoush that will likely continue for some time. He lesson here? Make sure you know your competition before moving into a new territory. Arguably, if not for Amazon’s intense products, it could have lost the stoush in Singapore.
Many Australian founders are tempted to move their headquarters to international regions because they will have better access to larger markets and more generous venture capital. However, other countries have cultural differences, which can mean chaos.
Of course, it can be done. Absolutely. However, having the right expertise to execute efficiently would be best after you have a robust local market. Aside from the cultural differences in other regions, you must also be aware of currency, units of measure, tax, religions, beliefs and customer expectations.
Having an experienced manager in charge of addressing these areas before you set up shop in other regions is critical. If you plan on scaling internationally, you must find the right people to advise.
Double-Down on What’s Working
Sounds simple, right? Well, it is. As you begin to scale, it is tempting to move to new systems. However, before you scale, you should have a proven system for profitability. For example, suppose your LinkedIn and webinar promotion generates a return on ad spend (ROAS) of $3 for every $1 you spend. In that case, you should increase your campaign budget before considering hiring salespeople.
The lesson here is to double down on what has been proven to work before considering moving to another sales strategy or entering another market.
Keep Innovating
Innovation should be woven into the fabric of your startup. s legend shows Google allows employees 20% of the Time’ to develop their projects. Google’s Gmail & Adsense are two of its most successful and highly profitable concepts reportedly developed during Google employees’ spare Time.
There are varying reports and rumours around 20% of the Time – some arguing that it never existed. e that as it may, 20% Time is a brilliant example of how innovation can form part of an organisation’s culture.
Committing 20% of employee time may not be possible at the beginning of the scale stage. Instead, it can be as simple as engaging your team in weekly brainstorming innovation workshops. He can assist with company direction for the future. Mall steps toward innovation can help build an innovation culture involving everyone.
A word of warning, though: it is essential not to lose sight of your core product. Innovate – but not at the expense of your core product.
Systems Automation
It is critical in business to have business processes in place before you scale.
Ray Croc, who took over McDonald’s, was renowned for his systems, processes and documentation. Croc, who also made his systems as simple as possible, once said:
The simplicity of the procedure allowed the McDonald’s to concentrate on quality in every step, and that was the trick.
Ray Croc
You may also like to get a hired gun to review your processes. ot because your team doesn’t know the best way to go about it but because it is always beneficial to have a fresh perspective.
I firmly believe in all businesses having a process manual that steps out the process for every business task. Hatway, all processes are in a central place. The manual needs to be a living document, as it will change over time as you perfect your systems and your company grows.
Automating processes with technology is an integral part of scaling because it prevents tedious and repetitive tasks that are boring for your team. Besides the expense of having staff repeat boring and repetitive tasks, repetitive manual tasks lead to inefficiency, mistakes and poor morale.
There are many processes you can automate with technology. From sales, you are sending invoices, marketing and much more.
Let’s explore some of the best software tools on the market to help you automate tedious, manual, repetitive tasks.
Zapier allows integration between software that is generally not meant to be integrated. The integrations are called Zaps, which represent taking data from one application to another. For example, if someone submits feedback via a Google Form, the customer’s data can be zapped to MailChimp, sending a thank you email.
ActiveCampaign is a leading platform I mentioned earlier. It is so good I want to mention it again. ctiveCampaign allows you to automate email marketing by sending emails to your prospects on autopilot. t doubles as a customer relationship manager (CRM) on the higher-paid plan.
Hootsuite and Buffer are essential tools for automating your social media marketing – which can be time-consuming. The amount of time you can save with these software suites is incredible.
RevealBot is a fantastic tool that you must check out. t allows you to create bulk ad variations for Facebook, which is truly unique. t also allows you to automate the ad scaling process. You can also automate the management of the platform’s Google Ads, YouTube ads, and Snapchat ads.
Calendly is essential if you are taking appointments. His incredible app automates the booking and calendar process. With the assistance of Calendly, your customers can manage this entire process themselves.
Viral Loops – while this is not business automation, I must give this contest software a massive wrap! I have used it on several projects. When registering for a competition, users are asked to share the competition to get more chances to win.
Not all steps within a process can be automated with technology. Ut you need to automate as many steps in your processes as possible.
