Your new product or service is gaining traction, attracting customers, and bringing in a steady stream of income. Your startup is no longer an idea — it’s a reality. So what’s next?
To move from startup to corporate giant, you have to be willing to take some leaps of faith. In many cases, you have to be willing to invest time, energy, and money into startup scaling.
At Smith.ai, we have the resources to help you scale your startup. From virtual receptionists to sales and support staff, we can help boost your approach. But first, you need to choose a scaling strategy, know the risks and challenges, and understand our 11 startup scaling tips.
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Startup scaling is the process of growing a business and its profits without substantially increasing its investments. Usually, a startup considering scaling has already gone through a season of growth.
In order for a startup to succeed long term, customers and revenue should grow exponentially as costs and investments grow incrementally — or not at all.
The main difference between startup growth and scaling is the cost and investments. During a period of growth, a company will invest a significantly larger sum into its strategies in order to boost revenue.
In contrast, scaling startups have usually already invested money during their growth period, so their cost sums should be lower even while seeing the same type of continued revenue growth.
Before jumping into scaling, it’s important to determine whether or not your company is ready. Consider these aspects of your company before scaling:
If you feel your organization is lacking in one or more of these areas, you may want to reconsider scaling. It may also be possible to involve investors, add new team members, or update IT systems to move forward with startup scaling.
There’s no right way to start scaling. Every company's team, product, cash flow, customers, software, and goals are different, so each needs a personalized scaling strategy.
While your strategy may be unique, your company will likely focus on one of these seven objectives:
If your company has followed a general route of funding so far, it may be time to change up your options. Be sure to communicate with investors and be transparent about your plans for expansion.
Investing in new, scalable technology systems or updating existing ones can help your company serve your customers better. Communications platforms, business and SaaS applications, CMS systems, and cloud-managed computing systems should all be efficient and flexible enough to support a startup that is considering scaling. Plus, following a technology strategy will set you up for future goals.
Creating new marketing strategies and assets will expand your company’s reach, effectively increasing visibility and supporting sales. Popular options for this strategy include:
Expanding your business offerings can help your startup’s scalability. Producing new products, features, add-ons, or services can increase your customer reach and better support current projects.
If your organization is using processes that are inefficient or expensive, it’s time to look into new and better options. Streamlined and automated processes — including workflows, production schedules, sales systems, and more — are popular choices for companies using this strategy.
For effective scaling, it can be important to have workers who know what they’re doing. Hiring experienced management can reduce stress and confusion while keeping employees and processes organized.
Your startup will eventually need to survive without you. This strategy focuses on creating processes that are able to be done by other people, leaving your business flexible and independent.
After creating a startup and initiating a period of growth, it’s time to begin startup scaling. To successfully scale a startup, follow these 11 scaling tips.
Even if you know the types of scaling strategies, you may not know which one is best for your company. First, make a list of your company’s:
Use this information to determine which goals your company could reach with the least amount of monetary investment. This is also when you should talk with other business owners or experienced scalers and attend events for startups to gain additional insight into startup scaling.
If your startup is using a variety of different systems or software for video conferencing, file sharing, team messaging, email, and other company activities, it’s time to streamline. Do some research about what systems are the most flexible and versatile, or search for options with compatible CRM integrations.
A few of the systems you should consider investing in include:
If you’ve strategized and streamlined, it’s time to automate. Time is a valuable resource when you’re scaling, and automating processes can redistribute your workers’ time.
Some tasks you can automate include:
For large established companies, it may make sense to hire employees for every need. However, startups may not have the funds, time, or expertise needed to hire people for one-off or nonessential tasks. If this is the case, outsourcing is the solution.
Outsourcing refers to the act of hiring companies or individuals from sources outside the internal workings of an organization. The most common benefits of outsourcing are:
Marketing is the best way to reach your audience and appropriately advertise your company’s values and products. There are a variety of strategies to consider when marketing your startup, so spend some time researching their benefits and understanding their limitations.
Want to set yourself apart from the competition? Focus on your branding. This includes company values, culture, product advertisement, logos, and other important company aspects like:
If your branding is strong, your customers are more likely to remember you and recommend your services.
Even though you may choose to outsource some of your work, your startup still needs to have a strong, reliable staff to scale. Your in-house employees should perform essential tasks that cannot be done by machines or people outside your company.
When staffing, choose individuals who are:
This is even a great time to hire people with past scaling experience, which can add an additional layer of knowledge and experience to your company.
A well-defined target audience can help direct your company goals, products, and marketing. To take it one step further, knowing your audience allows you to create solutions:
Targeting a certain demographic is one thing, but knowing the questions they ask, the reasons they need your product, the ways they obtain your product, and future problems they may encounter is another.
While successful startups have usually already spent time investing, fundraising, and raising equity, a startup’s finances are still important at this stage. Consider if you will need:
Without a strong financial position, opportunities, or cash flow, it can be difficult to scale a startup.
Before moving forward with scaling, it’s important to determine how you want to expand your business. You may consider one of these two expansion approaches:
Your chosen approach will help determine where you should focus your time, energy, and money, and where you need new or experienced staff.
Scaling can only be successful if your entire organization is invested in the process. By asking everyone to be accountable for personal and organizational successes, you can increase their feelings of ownership, opportunity, and commitment. This is where company culture and teamwork matter most.
Accountability can also:
Premature scaling is when a company expands too quickly for technology, products, or services to keep up, and it is one of the top reasons many startups end before truly succeeding.
Hiring too many employees, attracting new customers to an out-of-date or nonfunctional website, failing to update IT systems, or producing new products or services that need large investments could all lead to premature scaling.
Besides the end of a startup, premature scaling comes with many risks. The top six premature startup scaling risks include:
To protect against these risks, it’s important to make sure your startup is ready to scale by following the startup scaling tips above.
Even if your company is ready to scale, you may still face challenges. If startup scaling is the next step for you, be aware of scaling challenges, including:
If you’re prepared for these challenges, startup scaling could be an effective next step for your company.
If you’re considering investing time, money, and energy into startup scaling, it may be beneficial to look at examples of prosperous companies that used scaling to grow. While these three companies — Pinterest, Amazon, and Airbnb — began as small startups, scaling helped them mature into industry leaders.
Strategy used: Marketing
Pinterest launched in 2010 as a photo-sharing platform, effectively targeting a market before other platforms like Instagram launched. While many people weren’t originally interested in Pinterest’s offerings, the company invested heavily in marketing for their “invite-only” platform and met with existing users to better understand their ideal customers.
Eventually, their marketing efforts — especially word-of-mouth marketing — took off, allowing the company to grow without investing large amounts of money into other areas. Pinterest also simplified the ability to share pins, boards, and ideas, taking advantage of other social sites like Facebook.
Strategy used: Product or service; management
In 1994, Jeff Bezos began Amazon as an online book retail store, believing that the internet would continue to grow and prosper. Almost immediately, Amazon began a backward approach to product development. Instead of creating a product for an unidentified audience, Amazon found audiences and created products specific to their needs and queries.
Amazon has also created services and products designed to offer similar or better experiences than well-known competitors. These product designs have been spearheaded by intelligent, well-versed employees — like Mike George — who were retained or hired due to their product and development knowledge.\
Strategy used: Marketing; processes; technology
Airbnb launched in 2007 as a response to Craigslist and is now the largest vacation rental marketplace. It scaled by enhancing its processes, investing in unique marketing, and creating easy-to-use sites and technology. Airbnb began advertising door-to-door and then allowed potential customers to repost their Airbnb bookings on Craigslist.
The company’s website was more user-friendly than its competitors’, and the eye-catching product photos, personalized experiences, and affordable prices helped propel it ahead of Craigslist in the rental space. Additionally, Airbnb chose to invest in international sites and programming in order to continue its growth in countries outside of the U.S.
If your company has strong and reliable teams, customers, cash flow, and IT systems, it may be time to consider startup scaling. Streamlining and automating systems are a great place to start.