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In the corporate scale-up phase of a business, after you have proven your concept and established a solid foundation, you are ready to share your product with the world, setting you up for exponential growth and success. In 2023, however, the criteria for entry into this stage will change significantly, requiring a more nuanced approach.
In this time of scarce capital availability and high costs, the importance of precise timing and thrift has become paramount. Four companies he expanded by 1,000%, two of which were in recession. I learned a hard lesson about what not to do.
Related: 7 ways to scale your startup or business
Mistake 1: Scaling Too Fast
Fire, ready, aim. Scaling too early can be a fatal mistake these days. If you haven’t yet found your category, your ideal customer profile (like what specific problem you solve), or the best route to market, it’s not the time to scale.
If unit economics are grossly unsustainable, or if the core team core is not in place, it’s not the time to scale.
If you’re not getting pulls (inbound demand and word of mouth) from the markets you’re participating in, it’s not the time to scale.
Mistake 2: Scaling Too Slow
Oops, missed that. Conversely, scaling too slowly can result in missed opportunities. If you’re inundated with demand (leads are on the floor), you’re in the middle of a buyer platform or paradigm shift, or your unit economics are too good, it may be too late to scale. There is a nature. Especially if you are in a winner-takes-all or big first-mover market, don’t let competitors with inferior products steal your market share due to lack of resources while your competitors are expanding. please.
Mistake 3: Hiring the Wrong Leader at the Wrong Time
They were great with the company. Hiring is an important part of scaling. It is also one of the most difficult. It’s about finding the right people in the right role at the right time. Avoid the temptation to hire people like yourself. Embrace diversity and cover different perspectives. Be careful when hiring leaders from companies that are too big or too small. Next, document the specific desired outcomes and the skill sets and experience required to deliver those outcomes. And make sure the recruiter fits into your culture. If you’re hiring a sales leader, pay extra attention and consider things like go-to-market moves, stages, and buyers.
Mistake 4: Not Delegating
I tried delegating once, but it was too much work. As a founder, it’s natural to want to control every aspect of your business. But as we scale, we need to let go. Trust the leaders you hire. That’s why you worked so hard to recruit them. Give them the direction and support they need, then step back and get out of the way.
Related: How to know when it’s the right time to grow your business
Mistake 5: Overlooking Infrastructure and Operations
Someday we will be able to do that. As you scale, your infrastructure and operations must scale with you. Document core processes. Shared docs, checklists and playbooks work well early on. Invest in HR, including hiring an HR/HR manager. Don’t neglect technology, data tracking and analytics. The same is true for sales and marketing operations. Also, don’t add too much product or architectural debt. These are the foundations of any large scale business.
Mistake 6: Getting stuck on the fundraising treadmill
More money means more problems. Fundraising is a means to an end, not an end in itself. Don’t get so caught up in reaching your next fundraising milestone that you lose sight of the basics and economics of your business. Especially in today’s market. Continually improving fundamentals (product and market suitability, customer value creation, distribution, growth strategy) and economics (growth rate, profit margin and profitability, customer acquisition cost, customer lifetime value) Make sure. Make sure you can see, or at least draw, a clear path to sustainable profitability.
Mistake 7: Losing Your Beginner’s Mindset
What led you here won’t lead you there. Things change rapidly. Always be open to new techniques and ways to evolve your business. Don’t overlook fast-moving things like pricing and packaging, product roadmap expansion, category expansion, market segmentation and targeting, and secondary and tertiary growth acts. Please continue to be a beginner.
what’s next?
Expanding your business is exciting. It’s both challenging and complicated. But there is no need to repeat past mistakes.
Listen, learn, and develop a plan to grow your company successfully. With awareness and careful planning, you can avoid these common pitfalls. The goal of scaling is not just to grow bigger, but to grow better, delivering more value to more customers, creating more opportunities for your team, and having a greater impact on the market. Remember one thing. So if you scale wisely over time, it will pay off for years to come. As you forge your own path, stay curious, keep your novice mindset, and stay inspired by the thought leaders who have done it before.
Related: 5 pitfalls to avoid when growing or expanding your business