5 Clean-Up Items To Amplify Your Ability To Scale in 2015

This post was originally published on productgap.com

In the world of tech, the mantra for many startups is go fast, make mistakes, and fix on the fly.  This battle cry allows us to ship and test quickly to better understand the needs and limitations of our products, but also means that we make avoidable mistakes along the way. While mistakes can help us grow and learn, there is no pride in failing for failures sake. As we roll into the new year, it’s important to look back at 2014 to better understand what went right, what went wrong, and identify the barriers that, with a little bit of foresight, could have been avoided.

In order to thrive in 2015, what are the top 5 areas of housekeeping that make or break your ability to scale?

Reach out to the experts and hire them as necessary

Don’t try to figure it all out on your own. There are experts who you can learn from and when you’re ready, who you can hire to help build a scalable foundation for your startup. At our recent ScaleUp event we had Alan Federman, VP Finance at ClassPass and David Blanke, EVP Global Operations at Sailthru discuss challenges they faced while scaling startups. Approaching growth from the finance and operations sides, they contributed lessons that resonated with the audience from incorporating stock options into early compensation plans to when you should hire a VP of People. One overarching theme was that it’s important to consult with experts early on, because a poorly designed machine will churn out exponentially larger issues as you scale.

Consultants can be particularly useful to build out particular aspects of your machine, especially with your sales process. Founders typically close deals in their own unique way- they can get overly excited about the product because it’s their baby. But these founders lack the experience and knowledge required to hire and train sales reps as their company grows. Sometimes they think the answer is to hire a VP Sales to help, but this just creates even larger problems (and wastes money) since these VPs typically have little knowledge of the product or industry. Insourcing is the answer to building out your sales org and many other issues that early stage startups face.

Standardization

Before you think about scaling, you need to bring standardization to your organization. Many founders will systematize nearly every aspect of their company but will leave sales to be driven by ‘the gut’, without any guidelines or processes for new reps or leaders. Sales, like every other part of a business, can (and should) be broken down to a science. Templates, talk tracks, and cadence throughout the sales process should be standardized, tested, and then optimized. How will you know what’s working if every rep is left to just do whatever she thinks works?

Smaller processes need to be standardized as well for your business to run properly. What’s the protocol for your leaders checking in with their people? Which metrics are being followed up upon weekly?

Clearly defined business model

According to a CB Insights study, 17% of startups fail because they lack a business model. Entrepreneurs are frequently optimistic about how easy it will be to acquire customers, without considering the cost of acquiring the customer versus their lifetime value. So, you need to ask yourself about your business model. Is it scalable? And can you monetize your customers at a higher value than the cost of acquiring each customer?

Most people have an elevator pitch but their forecasting is limited to what happened verus what will happen. To get started:

• Use historical data for your benchmarks but build your forecast based on the business you want

• Make sure you have defined metrics for each person and division. You must be able to track your business and productivity in order to successfully scale.

People

In the early stages of a startup every employee is doing a million different things, and founders try to fill their people to max capacity. However, as your company grows, you need experts and specialists. Only some early employees will have the industry knowledge to make this transition.

At our recent ScaleUp event David Blanke, EVP Global Operations at Sailthru, talked a lot about people issues. He explained that while people love growth, they want to know where they’re going which is often unclear in a rapidly growing organization. Communication can become strained, and David recommended hiring a VP of people before your people start feeling pain around where they fit within the organization.

To improve team communication in 2015, try a tool called 15five. It encourages employees to fill out quick, weekly reports that can be read and addressed by leadership.

Bringing on effective leadership

Another reason that startups fail is poor leadership. You need leaders who understand and embrace the vision of the company, and then can execute it within not only their department but spread their vision and attitude to others.

What makes growing a company even more daunting is that the rules change as you reach each new tier of growth. When moving from customer testing, to customer validation, to scaling, the needs of the customer evolve as well as the needs of you organization internally, and we typically ignore the less sexy pieces that have long term implications in the future. You can’t be expected to see around every corner, but the good new is that many people have made big mistakes that we all can learn from if we take a moment to better prepare.