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Starting up is the easy part – here are the 3 key things to keep in mind when scaling

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The failure rate of start-ups has been well documented. Reports last year in The Sydney Morning Herald and The Huffington Post both stated that 95% of start-ups fail. That’s 19 in 20. What then happens to those that do succeed? What do we even class as success?

Unfortunately, success for many start-ups doesn’t see them move beyond the original idea and small business status. For some, that’s OK, for others, it may as well be failure.

The difficulty lies in scaling. As an entrepreneur, it wasn’t starting up that I found difficult, but making the right calls that would allow my business to grow without losing the fundamental nature of what I wanted it to be.

Scaling, or becoming what the US-media in particular like to call a scaleup (the next stage on from a start-up), can be particularly tricky. You’ve just started making money, but you’re going to have to spend again. And in some cases you won’t see immediate return. Here are the three most important considerations for scaling.

1. Timing

As cliched as it might be, start-ups are agile by nature. This generally doesn’t translate well to bigger businesses. Their sheer size and reporting lines means contracts will be longer, approval times will get blown out and a large number of people will possibly want a say in the project.

Be firm but reasonable. There is a reason the big business has come knocking on your door or awarded you the contract in a competitive pitch. But that doesn’t give you license to tell them that what they are doing is all wrong. It’s a basic but very common mistake.

Lay out your plan and discuss it in detail. Take time to go through the long contracts. Make it a point of getting to know all the stakeholders involved. Don’t lose sight of the goal or your expertise. If you have a strong opinion, communicate it professionally.

2. Understand your value

Too many times a start-up/scaleup will land a big client and start to pivot towards becoming a smaller version of that client. It’s all too easy to do. The might of the big company will start to shape the way things are done, opinions won’t be expressed openly and structure and process will begin to be determined by the big company solely. In the short term, this might keep the client happy. But they will soon discover that the unique value your business added is no longer what it was.

Always remember that your company is not anyone else’s. It does something different, unique, or better than anyone else. It offers value because your clients simply can’t do what you do with the skill or efficiency that you do it.

Pivoting is fine for a good reason. But make sure you have your value proposition front and centre of everything that you do to remain not just relevant, but indispensable.

3. Hire appropriately

Bringing on bigger clients can often mean new hires. It’s a long discussed topic that usually centres around not enough talent, company culture and similar issues. While these are important, hiring isn’t the monster in the room that some make it out to be.

Put culture first, talent second. Even in a strained industry, there will be a handful of people with the right skillset. Keep interviews light, make sure you can converse with the talent comfortably and that you share similar philosophies and understand each other’s goals. If they fit culturally, their skills on paper will work out. 

There are plenty of examples of companies that brought on big clients, hired too quickly, and quickly lost the client, or worse, went out of business. Easing the stress and workload quickly at the expense of making quality hires can be devastating. And don’t hire brilliant jerks. Simple. Need more reasons why? Here.

Alex Louey, co-founder of Appscore. With a global team of over 200 employees, his company counts large multinationals as clients.

Alex Louey
Alex Louey
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