Startup Lifecycle Series: Stage Four (Growth and Scale)
Your business is expanding, you are attracting and converting more customers and hiring employees to meet that growth. The fact is: you are no longer a startup. Now the question becomes how do you manage that growth? In the final installment of our Startup Lifecycle blog series, we provide perspectives of company scaling from “been there, done that” executives.
It Starts with a Culture Centered around People and Accountability
“It’s never to early to start thinking about your culture.” - Russ Yelton
Russ Yelton experienced first-hand the challenges of rapid growth when he assumed the CEO role of Arizona-based tissue bank and medical device company Pinnacle Transplant Technologies. He quickly realized that the challenges didn’t stem from revenues or customers, but rather with the overall culture of the company.
Consequently, Yelton pioneered new initiatives like company-wide retreats, the creation of internal communication outlets, and the hiring of mid-level management to oversee the various departments. He recognized the value of every employee but still acknowledged that a culture of accountability is the only way you are going to be able to manage the growth and development of the company consistent with the high-level vision set by the leadership team.
Ari Weinzweig of Zingerman’s adds that building a successful organizational culture is a 5-step process: Teach it through empathetic communication and storytelling; Define it with a strong corporate vision, mission and values; Live it with actions that match your words; Measure it to understand what is working and what needs to be changed; and reward it often and diversely to reinforce positive behaviors.
Understand your Smallest Customer
“It was not easy sending business down the road to a competitor, but we knew it was right for us.” – Darren Wilson
We previously offered insight into the growth story of Bluemedia. Co-founder Darren Wilson knew that that the large-format print and signage company had reached a watershed moment in its lifecycle when they had to better align their customer segments with their newfound growth. For Darren and the Bluemedia leadership team, this meant giving up tangible revenue, from customers they may have even served previously, to another vendor; however, the cost of doing business was more than the revenue they would have earned in those instances and was therefore a necessary maneuver. This also emphasizes the importance of a strong company culture to be able to make those hard decisions.
A recent article published online in the First Round Review reinforces this “subtract as you add” mentality during a startup’s scaling phase because it can streamline processes and add new levels of efficiency. Too often entrepreneurs are focused on adding – customers, employees, revenue, etc. – that they lose sight of the opportunities where they can cut out the excess.
Continue to Test, Measure and Learn
“Never protect the past. If you never protect the past, you will be willing to never love [it] so much [that] you wont let it go, either.” – Ginni Rometty
Ginni Rometty, Chairman, President and CEO of IBM, gives perhaps one of the best pieces of executive advice for a startup in the growth phase. As she points out, you never want to fall too much in love with the way things were done or are currently done because markets change, people change, times change. She adds: “Never define yourself as a product…if you live and define yourself by your product or competition, you will lose sight of who your customer is.” Companies need to evolve and continue to develop new solutions to meet the problems of their customers, who are evolving and changing themselves.
And with that you are right back to the validation stage of the startup cycle – testing new ideas with an evolving customer base, but THIS TIME you are driven by a robust corporate culture and vision that is setting a path of quality and success.