The best time to pursue startup growth is when you are ready — not when an opportunity presents itself to do so. Growth should be part of any company’s goals, but only if it’s part of a predictable revenue plan. Growing too fast too soon can harm any business.
Recent studies show that 74% of startups fail because of premature scaling. If you’re ready for growth, read on for three practical but effective tips in scaling a startup.
1. Observe a Product-Market Fit Method
The goal of a product-market fit method is to maximize customer satisfaction. You have to create a system where consumers buy, use, and tell other people about your product enough times to sustain your sales and profitability.
While there is no one-size-fits-all way to achieve startup growth, here are some ways to get you on your way:
Identify your target market.
Understand a potential client’s pain points.
Define your unique selling proposition (USP).
Develop a minimum viable product (MVP).
Test your MVP on paying clients.
If you have clients who are willing to test your products even if they’ve rejected similar ones, that’s a good indicator of how valuable your product is. Additionally, if you have current clients from past referrals, you likely addressed a pain point your market has.
2. Develop a Growth Experimentation System
Growth experimentation means using data and messaging to achieve predictable revenue. Many startup founders confuse this necessary process with a test. However, they are not the same.
A test is a pursuit that ends with output, while growth experimentation is a repeatable system that includes testing. When executed correctly, growth experimentation becomes a reliable source of valuable information for any business.
Many successful startups use the growth experimentation process in business operations, from marketing to purchasing and customer service. It acts as a bridge between perception and reality.
3. Scale at a Reasonable Pace
For startup founders, venture capital money is usually an excellent motivator — and pressure source. Founders who receive funding often feel like they have to grow drastically to show results. However, that mentality leads to burnout, uncertainty, and ultimately, failure.
If this happens to you, your go-to moves might be doubling down on marketing and sales efforts, investing in new infrastructure, or boosting customer service training. Of course, there's nothing necessarily wrong with that, but it's an absolute must to have a predictable revenue plan in order to sustain growth.
If you scale at a reasonable pace, you will address different pain points that lead to more revenue. Additionally, your team will remain focused and motivated instead of feeling lost and overworked.
Look at it this way, if your goal is to summit Mount Everest, you're not just going to start hiking right? If that's your approach, there's absolutely no way you'd meet that goal. You have to know the best route and have the right supplies, you have to be able to adapt as needed, you have to pace yourself, you have to be ready.
The startups that change more lives and are profitable- are the ones that were able to create predictable and sustainable growth, the ones that were ready.