I’ve seen businesses go from one-to-two man teams to hundreds and even thousands of employees. Some of those businesses were founded by me, others I supported through strategic partnerships. There’s no secret – some businesses failed, some stopped scaling at a certain point, and others are global household brands. These experiences are valuable, I think, to business leaders and fresh founders. Whenever anyone asks me to remember “the hard times”, I never think of the beginning. In fact, I think the beginning phases are often the most exciting. While they’re difficult and require some creative thinking, hitting the first downtrend or wall of growth is much more memorable. So, I’ll go through some of the challenges I’ve seen and how to beat them at any stage of the business journey. Bootstrapping vs Investment The common knowledge goes that it’s always better to spend someone else’s money to pursue your business idea. In many cases, that is true. I think, however, the ubiquity of seeking investment has become pervasive – some business models don’t need all that much to get off the ground. Scaling will always be easier with a lot of money to spend, especially when it’s not heavily restricted. But you are trading off much more than equity in the company. In many cases, you’ll need to send in detailed reports on a regular basis. You’ll also have someone breathing down your neck, pre-set monetary and human resource targets, etc. Sometimes, the ROI calculations may be so strict that even your strategy will have to adapt to meet investors needs, not market needs. Some business models are impossible, at least nowadays, without major capital or outside investment. If you wanted to start an insurance company without investors, I could only wish you luck – there’s simply no way to compete in such an industry without sitting on a dragon’s hoard of gold. But various agencies, apps, and niche software can be started without millions of dollars prepared for the business. Again, investment would help you scale more quickly and whether you need that depends on the overarching business strategy. If you need to be the first to the market and acquire a major share of it before any serious competition appears – investment makes sense, even if you don’t strictly need it. But in all other cases, you can do just as well with bootstrapping. You’ll also learn a lot more along the way, which will make working on other businesses easier. So, seeking investment should not be the default option, only done when necessary. Facing Stronger Competitors You don’t always get to be the first to the market. In some cases, you’ll be second or third at best. In many scenarios, there’ll be a few established players and numerous smaller companies that will compete for the same audience. That’s what we faced at IPRoyal. There were a few well-established industry leaders and copious amounts of smaller competitors. Yet, we still started the business and made into one of the top 5 companies in the field. One key thing to remember is that you can’t directly outcompete industry leaders, especially if you didn’t seek investment. They have more knowledge, resources, and better branding – on all counts, they’re well ahead of your company. But established companies have two weaknesses. One is that they’re much slower to adapt to change than smaller companies. If new needs arise, you should always be prepared to be the first to make the necessary changes to capture the audience. On the other hand, they’ll be focusing on their own major customers. Big brands, especially in SaaS, usually survive off of starting with smaller customers and scaling upwards to enterprise-level companies. Established businesses in SaaS will often focus on enterprise customers as not only do they have the strictest requirements, they usually bring in the most revenue. That leaves gaps for newcomers to capture smaller businesses. That’s what we did. We noticed the market had a distinct lack of educational content that would be most interesting to SMBs, so we changed our marketing strategy to match. A simple approach of targeting audiences bigger players might have missed allowed us to grow into an industry player ourselves. Slowdowns & Growth Reversal Hitting a wall in business is almost inevitable. You can’t keep growing at the same pace quarter after quarter. That might work for the first few quarters or up to a year and a half, but eventually you’ll run into some sort of stoppage. That may be due to capturing enough of a part of the market that there’s fewer clients left, your marketing strategy targeting the same people over and over, various industry changes, new competitors – and a whole host of other reasons. Regardless, even if you know that it’s normal for a business to experience a slowdown, it’ll still place an emotional toll on nearly any business leader. After all, things were just going so great and now you might be facing major changes. One strategy I always applied whenever this happened is to take a step back and review the business foundations. There’s a few key aspects to any business – the problem it’s solving, the market that’s buying the solution, and the resources used to go from the first to the second. When you hit a wall, it’s time to go back to the drawing board. Evaluate if the problem persists and if it hasn’t changed over time. Additionally, assess if new solutions have been created that may be just as effective at solving the problem – that could be turning buyers towards other implementations. On the other hand, evaluate how much market you’ve captured. It’s a sobering thought, but sometimes you have already done so well that there’s not much left to do. That usually happens about a decade later, so if you’ve been in the business for just a few years that’s an unlikely culprit. Market players can also change over time. While new businesses appear daily, your existing clients may be churning due to various reasons. Assessing churn and new client acquisition, comparing it to the market in general will give you a good objective look on how things are going. You may also have grown to the level where you need to target larger businesses such as enterprises. Marketing and sales to large corporations is a lot different than selling to freelancers or small businesses. Finally, when growing your business, your team will face new challenges that they aren’t equipped to deal with. It’s fairly usual to have a team that’s great at scaling during the early stages of a business but face issues when further growth is needed. One of the most tried and tested approaches I’ve used is to hire external consultants to bring the skills to the team. They usually stay with the company for up to a year as freelancers or agencies and the goal is not even to break through the barrier. It’s to give the team the tools that are needed to do so. Conclusion Writing out all the strategies one could use to continue scaling a business in a single article is nigh impossible. That’s the exciting part of business – challenges and barriers are always new. But they also follow a trend. No new challenge is so novel that someone hasn’t dealt with something similar before. You just have to spot the trend and adapt a process to fit the new environment.

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Breaking Down Scaling Barriers

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