Whether yours is a nonprofit or for-profit, growth is the goal. You want to drive results, make an impact, create change, or disrupt stagnated systems. But in order to propel your mission, you have to grow at a pace that both stretches you and is appropriate. And so, today, we’re dedicating our time to writing about scaling organizations or scaling your startup.
When it comes to scaling organizations, there’s a lot to know. Setting an appropriately rapid pace for growth is tricky. So, you need to hone in on where you are and how you’ll get where you want to go.
Feeling some nerves? That’s okay. That’s why we’re here—let’s go through what you need to do and how to go about scaling organizations or scaling your startup.
Scaling Organizations vs. Growth
First, let’s lay out the difference between growth and scaling. Because while the two may seem interchangeable, there is a big difference.
The difference between the two is that while growth is linear with respect to resources and revenue, scaling refers to growth in revenue with similar resources.
Think of it like this: growth is the increase of revenue from increased investment in resources such as capital, people, technology, and the like.
Whereas scaling refers to an increase in revenue without a significant increase in resources. You could send an email to one person or an email campaign tool en masse to a thousand. Either way, same effort, similar expenditures in the process—but very different effects.
While growth is steadier, less risky, and more predictable—it obviously takes more investment, more time and is less profitable than scaling.
On the other hand, scaling takes less investment and time and adds more revenue per unit of investment. However, it’s also riskier and more unpredictable.
Many, if not most, startups choose scaling organizations rather than a more linear growth model. It’s the scrappier, more startup-y version of growth. However, it’s not a one-size-fits-all strategy.
It’s important to identify if your product lends your company to scale. If your offering needs an extreme amount of resources to scale—it may not be time, or it may not be possible. In that case, it’s better to stay a smaller and leaner but successful organization.
What You Need for Scaling Your Startup
Making data-driven decisions
Meaning decisions that are based more on fact and research than intuition. You may not always have data to back up your decisions. For instance, creating positioning with minimal previous website traffic. But, in that case, run testing and aggregate data before implementing your positioning strategy on a large scale.
Prioritizing customer satisfaction
Customer satisfaction is key to scaling. And that should be self-explanatory—but let’s dig into it a bit.
Without customer satisfaction, your churn will be high, your NPS will be low, and you won’t see a growing user base. In addition, you’ll have little social proof, which is a massive motivator for customer acquisition and sign-ups. You know the rest of that story.
But, with high customer satisfaction—with the product and its UX/UI, the customer service, and the all-around CX, you could see incredible success in growing your user base. This is especially true with the right product-market fit and for product-led growth.
Accounting for stakeholder feedback
Your stakeholders—team managers, the executive team, and investors—will have hopefully seen a thing or two. And ideally, there should be a conflict-free consensus between them in guiding operations and setting goals. This is crucial to creating a cohesive sense of direction for the company—and achieving long-term goals.
Implementing core values, set by the tone at the top
Culture is significant, especially for a scaling organization that needs to function like a well-oiled team (mixing metaphors, but you get it.) So, it’s crucial to set core values that guide how people work together—and it’s essential to stick to them.
But, it’s the most important that they are actionably reinforced by the tone at the top—by management—who set the model for everyone else in the organization.
Creating a sense of urgency and accountability to motivate the team
Urgency doesn’t mean work until you drop—that’s not sustainable. But, giving ownership and responsibility to team members while creating a sense of urgency for success is a huge driver of results.
Streamlining operations through processes and tools (without bureaucracy)
As you grow, the more investment you’ll make per hour. And that means eliminating doing things manually and implementing tools and processes that will streamline operations.
For instance, with customers—with more signups will come more of a need to instrument CRM tools to manage relationships with them. Additionally, as you see more traffic and sign-ups, you’ll need to ramp up marketing with marketing automation tools.
Attracting experienced hires with incredible company culture
Investing in employee and recruiting marketing is no joke, and it’s crucial to do it early to attract top talent. That is, the talent that has seen scaling organizations firsthand, knows what it takes and how to achieve it.
So, more than just marketing and emulating a good culture, it’s essential to cultivate a culture that attracts like-minded and experienced hires. With just good marketing but an actual bad culture and a bad reputation, you’ll see high employee turnover or low applicant numbers. And that’s not beneficial to any organization looking to scale.
The Challenges and Timing of Scaling Organizations
There are many challenges that come with scaling your startup. And, it’s essential to overcome them to time your scaling well. In fact, in a study by The Startup Genome, 74% of 3200 startups cited failure due to trying to scale too quickly. Whereas those who avoid premature scaling and scale properly typically see growth that’s 20x faster.
So, what challenges do you need to overcome before your attempt at scaling organizations?
- Raising significant investment: scaling stage can generally be around your Series C fundraising round—and that round can reach around $100M
- Achieving long-term goals: meaning goals set early on, to do with user acquisition, ARR, market penetration, and hiring.
- Maintaining growing data flows: as your company grows, so will the amount of data it has to consume and track in order to make data-driven decisions. So, tools like CRMs, ERPs, and marketing automation are crucial for growth.
- Avoiding micromanagement: efficient growth operations rely on trust (and effective work) done through delegation.
- Culture cultivation: promoting a company culture that’s employee retention-boosting; one that onboards and motivates new hires quickly and effectively.
Well, this was a lot. We know.
Coincidentally, hi, we’re Goji Labs—a product and software development consultancy with experience in designing, “rescuing,” and deploying hundreds of products.
Have any general questions about who we are and our authority on the subject?
– Goji Labs