Size matters (part 1 -- growing your business)

A common mistake in start ups is not expecting to succeed. I'm sure you want to succeed and that you hope you will succeed. But if you don't plan to succeed, you will -- at the very least -- have some troubles later on. At the worst, your company could suffer irreparable damage to its reputation as you try to scale your company.

It's worth going through the exercise of looking at each functional area in your company as you think about how to scale a start up.

Product Management - Sure, your first idea was great. That's why you started the company, but how do you ensure continued success? How do you know that your next idea or the next version of your product will be as good?

Software Development and Delivery - Your developers created platform that works great when you have 1,000 users, but what happens when you have 100,000? 1,000,000? 10,000,000? Will your platform continue to work? Will you just have to add more hardware? Or will you have to do a wholesale re-write of your system?

Customer Support - You have developed intimate relationships with your first few customers. They love it. You understand them and their needs. When they call you and ask for help, you may even know them by name. How can you make sure that you still provide excellent customer service to all your customers as you grow?

Sales - The first few sales were probably done by the founders. They may even have been to people the founders know personally. What happens when you need to sell more? How can you ensure that every sales person understands the product well enough to sell it effectively? Are they all selling the same thing? Are they selling at the right price?

Marketing - You made a kick-ass website to show the world you are a real company. What else should you do? What do you say to the analyst community? How do you share a complete and consistent message to the world?

The Executive Team - When it was just you and your buddy, everything was very clear. Who else should be on your executive team? How do the executives connect to marketing, sales, development, operations, etc? What contributions should you expect from an executive? Should you still be running the show as your company grows?

In all areas of your company, you can look at growth a few different ways. The first thing you usually think about with growth are the metrics. How should you measure your company's growth? Revenue? Number of subscribers? Number of licenses sold? Number of end users?

Another way to look at growth is bottlenecks. What are the things that will prevent you from growing? Is your company very dependent on people to execute your service? Will the number of employees be a limitation to growth? Will location limit your ability to grow? Is there simply not enough of a market in the type of customers you have been targeting? Do you need to start looking at selling to new industries? Do you need to make tweaks or wholesale sweeping changes to your product to access a larger market? Do you need more funding? If so, what will you use it for?

In future posts in this series, I'll talk about each of these areas and will use as many specific examples of real-life companies as possible. There are companies out there who have done all of these well. There are also some companies who have failed -- and sometimes recovered -- from these mistakes.

Why not spend some time thinking about the growth of your company today? What does growth mean for you? How will you get from where you are today to the next stage in your company's evolution? It's easier to make plans now than to correct mistakes later.


photo credit, monomatt