By David Steinberg
The most exciting time in any company’s life cycle is a period of strong, sustained growth. While winning is rewarding, sometimes what got you there is what will keep you from getting to the next level.
When many startup founders are riding the crest of a wave they’re most susceptible to the temptation that they’ve figured it all out. Although it seems counterintuitive, the risk is real: success today can sow the seeds of future tomorrow.
We know it to be true. We know the factoids: only 10 percent of the Fortune 500 from 50 years ago are on the list today. We know the stories of Circuity City, DEC and Blackberry, but we don’t think it could happen in our businesses. After all, we’re the disruptors.
The good news is that with self-awareness, sound planning and a willingness to adapt, an entrepreneur can keep on riding that wave to even greater heights. With that in mind, here are four tips that will help a young business thrive in the modern economy.
1. Build to Scale
Plenty of companies find they are successful early on but eventually fail due to growing too fast. Isn’t growing too fast like being too rich or too thin? No. Outrunning your capacity, your infrastructure, your supply chain, or your working capital are pitfalls of young companies.
For entrepreneurs today, scaling a business is easier in concept but still challenging in practice. The explosion of cloud-based solutions such as AWS and SaaS solutions such as NetSuite has provided startups with more horsepower for less money. But all of these tools require sound business strategies as well as repeatable and scalable processes. They also require great people.
2. Build a Team
There’s a strong temptation for self-made entrepreneurs to control everything. Letting go is hard. It takes many people a lifetime to realize that they’re not the best at every task, and by then it’s usually too late.
Learning to delegate key day-to-day decisions to others can be difficult, but doing so is crucial for a company to scale. Recruiting, onboarding, training, and building up great people is the single most important task of any entrepreneur. If you give the right people the chance to take the initiative, you’ll be surprised at what they -- and you -- can accomplish.
3. Be Ready to Pivot
To maintain relevancy in a fast-moving world, a business needs to think a few moves ahead – understand customer needs/requirements, dissect competitors’ moves, and build assets and capabilities that can help you win more than one way.
The ability to pivot is a requirement for sustainable success; pivoting itself is a means to an end. When scaling, an entrepreneur maintains a laser focus on existing strategy and execution. That’s good. But great entrepreneurs also keep a laser focus on the customer – follow the customer and prepare the company to move where the market is going.
4. Fail Fast
It can be difficult for a young company to navigate between sticking with the core business and pivoting; executing on the existing business versus exploring new initiatives. While successful entrepreneurs focus on bringing their business concept to life, growth often requires trying new things. This may not be a pivot; it may be an adjacent move.
Remaining excessively rigid in the execution of a strategy can make a business brittle and unable to respond to a dynamic marketplace. Growth requires risk, but it doesn’t mean the business has to be risky. The level of risk should be commensurate with the reward; the level of potential impact commensurate with the level of effort.
Most importantly, don’t get caught in a box. When you fail – and you will – make sure you fail fast and fail with a lesson. Failure is a good teacher but a bad habit.
While it is an investment – of time, effort, and energy – putting the tools in place to scale will be the difference between sustainable success or a flameout.
