4 Important Tips to Help Scale Your Startup in 2021

Most new businesses don’t make it. 

In fact, 74% of startups that try to scale too quickly fail, according to a 2011 study by The Startup Genome. Scaling your startup for long-term success is critical. But when is the best time to scale, and what is the best way to do it?

“Frequently, the difference between success and failure is the resolve to stick to your plan long enough to win.” — David Cottrell

Sustained and sustainable growth is the goal when you’re thinking of scaling. To set yourself up for long-term success, develop a plan which includes these four foundational questions:

1. What you will scale?
2. Why scale?
3. When to scale?
4. How do you scale?

Here are four milestones you need to nail if you want to successfully scale your startup.

1. Outsource Your Non-Core Activities

You are great at what you do, it’s true, but you’re not the best at everything. In fact, there are many areas of your business where you could do with an expert opinion. Understand your business goals and focus on them.

Outsource your non-core activities to keep control of your budget and focus on your core competencies. Most startups lack the in-house personnel to deal with things like payroll, staff training videos, and accounting. If payroll isn’t part of your core business, don’t employ a payroll clerk.

Business communication platform, Slack, outsourced IT design and development to MetaLab, a Canadian company. They enabled Slack to scale to 15,000 users within two weeks of launching.

Event ticket aggregator, SeatGeek, outsourced their tech development from the beginning, helping them keep costs low in the early days.

Every outsourced project you can identify is guaranteed to save you money. Once your business has scaled to a certain size, you can consider bringing some of those functions in-house. Until then, outsourcing to service providers will help you get there faster.

Outsourcing consultancy services are an excellent way to ensure you remain focused on your core activities in-house, while your needs are being assessed and dealt with.

One of the most crucial parts of what outsourcing consultants do is review your processes and find what you should be outsourcing to get better results from service providers at a lower price. As their focus is on helping you scale, they offer unbiased expertise into the best options for your needs.

Using the services of an outsourcing consultancy firm serves a unique purpose: freeing up your time and resources so that you can accelerate growth. Ensure the firm you deal with fully understands your business and can deliver optimal results so that you can concentrate on growth.

2. It Takes a Village to Raise a Child (or Scale a Start-Up)

Image Source: unsplash.com

I've heard it said before that “If you’re the smartest person in the room, you’re in the wrong room.”

Make sure you employ the best people to perform your core, in-house work. Are your employees well-credentialed? Do they fit in with your company’s culture? Are they invested in your success? Setting aside equity for star employees is one way to align your goals with your staff’s.

Finding the best people is critical, especially in earlier stages when runways are short.

Surrounding yourself with high-quality personnel, making sure they feel motivated to deliver the best results, empowered to do so and appreciated for what they bring to the table is crucial for your startup to survive. Never attempt to scale when you still haven’t found your “village”.

3. Find your Sales Channels and Fill Them With Value+Entertainment

There are many ways to reach your target market and many ways to waste money failing to reach them. Identify the channels that work for you and stay focused on them.

Companies looking to scale will typically rely on indirect sales channels to grow. Direct channels and word-of-mouth don’t scale. Social media can be highly effective in attracting customers, but you must choose the right channels.

Are you targeting young adults with lifestyle products? Try influencer marketing on Instagram. Are you a B2B SaaS provider targeting Fortune 500 executives? LinkedIn might be a better fit for your social media marketing attention.

According to LinkedIn, 80% of the leads B2B marketers get from social channels come from LinkedIn. Make sure you carefully get your message to where it will be most effective.

Once you’ve selected the best channel for your business, remember that people log onto social media not to be sold to, but to be given value and/or entertainment. Find a way to convey your value in an entertaining way and do so consistently, you will steadily build a loyal base and start getting inbound leads.

We are entering a person-to-person sales world where both businesses and consumers, expect you to be able to present to them through webinars and live recordings. Alex Mashinsky, the CEO of Celsius Networks, a mobile crypto wallet, hosts an AMA (Ask Me Anything) every Friday, giving customers frequent and direct access to the head of the disruptive and novel company, helping build trust.

4. The K.I.S.S (Keep It Super Simple) Principle

Image source: Nivea ad campaign

Although KISS is a design principle, I have found it to be relevant in many areas, and building a startup is no exception. 

Do one thing better than anyone else, and explain to your audience why it matters.

Adding extra services, growing your market share and penetration, and all good things come to those who wait and focus. Make sure you can scale your core business functions before expanding horizontally.

The Honest Company began with a focus on safe, affordable, and eco-friendly childcare products. It quickly grew into a unicorn — a company with a valuation of over $1 billion.

A few years later, they began expanding into lifestyle and home product lines. Then a series of missteps and legal problems saw their valuation fall, as they lost oversight over quality control.

After an executive reshuffle, they decided to refocus on their core product lineup and their original mission to sell childcare, beauty, and lifestyle products. Importantly, narrowing their product offering back to how they started meant they could bring quality control in-house and restore their image.

The moral of The Honest Company’s story is to keep it simple. Trying to expand into non-core areas, particularly early and particularly when it hurts your focus on your core products, can do a lot of harm to your brand.

Source: The Honest Company's Facebook Page

The Honest Company had the advantage of being able to leverage the profile of its celebrity co-founder Jessica Alba — an advantage most startups don’t enjoy. However, even with their added advantage, when they tried to grow too quickly they almost lost everything. For startups without a celebrity founder, making sure you pace yourself is even more critical for your startup’s success.

Staying Lean and Focussed is Key

Notice a consistent theme among these tips? They all relate to staying lean, efficient, and cost-effective. Keeping costs low and spending money wisely are best practices for startups generally and are especially important when you’re looking to scale.

By outsourcing non-core activities, you free yourself up to focus on the core growth drivers of your business. Having a small but highly competent workforce gives you the best chance to build a company that delivers for its customers. Only employ the best.

Do one thing better than anyone else in the market. Don’t overstretch yourself. It can get you into trouble.

And keeping focused on one project at a time will help you maintain a disciplined approach to project management and prevent you from becoming distracted.

By keeping lean and staying focussed on your business goals, you give your startup every chance of scaling for sustainable and long-term success.