Hyper-growth stage of business development can be a roller coaster ride with unforeseen challenges, complexity and ambiguity in every step.
Congratulations on making it to the next phase of your startup! As a CEO of an early stage venture, you have achieved a significant milestone if your startup has been able to find the product market fit and now moved into the stage of hyper-growth.
As the historical data suggests, 50% of businesses fail before the 5-year anniversary. What is more interesting is 90% of the businesses fail in their growth stage. So if you are the CEO if a hyper-growth business, here are a few important tips for you to keep in mind as you champion your company and organization towards a successful business.
Ajay Singh Founder, Stoodnt.com, a career guidance portal, strongly advocates for building the right team, as he feels it is critical for the leader of an organization to hire complementary team members and build the right leadership team, including the consideration of whether you are the right leader to transition the startup from current stage to the next stage.
What You Do Now Impacts Your Organization In The Long-run
Singh also suggests using cash productively. “If your company is growing at an exponential rate, you need to invest money in hiring, development and driving growth of the business. Having sufficient cash to run and grow operations is one of more important task, so make sure you have a good CFO keeping an eye on cash flow, investment requirements, expenses and fund raising. Approximately 80% of startups die because of poor cash flow,” he explained.
Staying focused on the customer is extremely critical. Your customers have bought your product or service and made your company successful so far. “Do not take your eyes off from servicing and keeping your customer satisfied. They are your biggest assets when you are a young company. If you are not able to service and meet their needs, they will go to a competitor or to other products and services,” notified Singh.
This is also the time to start thinking about processes to scale and Singh says now is the right time for you to start thinking about putting certain processes in place for the organization to scale effectively and efficiently. “Processes can be an impediment when you are early stage startup, but start to get important as you grow and scale. What you do now impacts your company and organization 12-24 months down, as you get larger,” he elaborated.
Open & Honest Dialogue Across Company
When it comes to growth, every company has a unique path to follow. Hyper-growth stage of business development can be a roller coaster ride with unforeseen challenges, complexity and ambiguity in every step. According to Amit Ramani, Founder & CEO of Awfis Space Solutions, a strong leader is required to anticipate and admit the short comings and keep an open and honest dialogue across the company. “For Start-ups it is imperative to have a robust business plan, a clearly outlined list of future endeavours that the organization wishes to achieve against measurable goals. Prioritization of tasks according to its importance and weighing its’ impact on the business also becomes key when on a growth trajectory,” he maintained.
The other essential thing is to focus on strategic hiring where the leader can rely on a strong network of people who will capture the company’s philosophy, remain focused on goals and will ensure all problems are solved on time. “In a hyper-growth state, it is important that CEOs communicate the organization’s vision and ongoing endeavours frequently to internal and external stakeholders to ensure transparency and building employee trust. When your company is expanding at an explosive rate, empower your team by setting directives for them to lead, build your brand and nurture your booming start-up,” enumerated Ramani.
Remain Open To Possibilities & Ideas
Michael Lyngdoh, co-founder, Tripoto, attributes Tripoto’s success to strong support from his employees and investors. “We had to focus the frenetic growth on what really mattered,” he says.
His first tip is to “Identify and focus on your priorities”. They used the Pareto principle to identify the 20% of activities that were bringing 80% of the value. These were marked as non-negotiables. The company would collectively work towards these focus areas and reduce money and time spent on the others.
Lesson number two from him is to hire emotionally adept and agile leaders. “A key reason for Tripoto thriving while many others failed is because our team is made of dedicated and strong employees that are able to transform the way they think and act quickly. We haven’t lost the startup mentality even as we’ve grown,” he says. “People still feel as free to walk up to me or my co-founder Anirudh with ideas as they did when we were a small crew,” enthused Lyngdoh.
This leads him to offer his final recommendation, “Don’t lose the best part of being a startup – the scrappiness! No matter what phase or pace of growth you are at, remain open to possibilities and ideas. Don’t confuse growth with structural rigidity. If you become a large corporate with silos, it will become hard to innovate, create or kill as quickly as you used to when you first started out! These are my key principles for successfully navigating hyper growth for startups.”
Finally, continue iterating, innovating, learning and moving fast. Never lose the sight of being impatient, innovating, learning every day and moving fast on execution. This is what separates success from failure and one of the main reasons why more established companies and brands get disrupted. Congrats again and good luck in your steering your company to bigger success!
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