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Scaling Up Your Startup - Challenges You Will Face

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by Startacus Admin

scaleup challenges

Starting a business and building a startup is hard work - a bumpy road full of challenges to overcome. But overcome them you have. You have attained product/market fit, you are profitable, your brand is known, you have completed the first stage of the journey to the huge success you’ve always dreamed of. Now you want to be more profitable, make your brand known far and wide, attain greater success: now it’s time to scaleup.

It’s a time of excitement and enthusiasm the likes of which you probably haven’t felt since you conceived the startup. But remember that bumpy road? It’s not going to get smoother. Scaling up isn’t just more of the same - its unique problems and challenges may catch you by surprise. Unfortunately, there are so many that we couldn’t fit them all into one article even if we knew them all - and the only one who can know all those unique to your specific startup is you, after you’ve encountered them. But we can certainly do our part to help you be prepared.

Engagement

Most startups will engage in customer support to some degree, no matter the industry or product. As you scale up, the number of emails or calls coming in will increase. Each and every one of these will take someone’s time away from something else - this diverted time will scale up along with your business.

Imagine a software startup launching a new product or even just rolling out new features. A single bug could result in numerous reports and complaints from customers (and that’s not even mentioning issues that third party software and hardware could cause). If you are unprepared for this, how much time will be taken away from fixing the bugs and continued development in order to answer these customers?

You will also find more and more people visiting your website and social media. Is your web server prepared to cope with larger numbers of visitors? How do they deal with DoS attacks? Who manages your social media? Because they are about to get a lot busier.

Product woes

As alluded to above, as you scale and release more products, add to your existing product, etc., you will encounter more issues with the product itself. Using the software startup example again, the more complicated the product is, the more likely it is to have bugs and unexpected quirks that require fixing. Time that your team spends on fixing is time not spent on development.

Additionally, the number of people who abandon your product due to issues will increase; one lost customer may become one hundred.

Scaling Up Your Startup

Expense

The fact that scaling is going to cost you money won’t be a surprise, but it doesn’t mean you’re totally prepared for how much it will cost, so it’s worth mentioning. The cost of things you are already forking out for will scale of course: marketing, materials, wages, software, hardware, etc. There will also be new expenses. Perhaps you’ll suddenly need a more secure website than before. You may need to employ, or outsource to, new people for unexpected positions (such as the aforementioned customer support) or because team members can no longer afford to be multitasking. 

Although your revenue will scale with your business, there’s every likelihood it won’t scale enough to cover the extra costs. If your forecasts have you barely scraping through a scale up, you need to think again - you don’t want the inevitable blindsidings to end your business.

PR

While you are small, the public complaints you get may be more hurtful personally, but they are usually less damaging to the business. As awareness of your brand grows, those social media complaints and criticisms will be seen by a lot more people, more potential customers will take notice of them, and news of even the smallest of issues will spread further. The larger the business, the less patience customers have for problems. This will do more damage to your brand, and will make earning back trust a lot harder than before.

Scaling Up Your Startup

Competition

This is perhaps not a challenge unique to scaling, but it is certainly worth bearing in mind as you do so. What will happen if another company comes along with a similar product? Is your USP strong enough to keep the competition at bay and hold on to your customers? Are you willing and able to make alterations to your direction in the middle of scaling?

Conversely, is there already bigger competition out there and you think you can compete already? Do you want to try to out-price them and poach their customers? You might want to think again. Not only are they bigger than you and still successful for a reason, but you may not be prepared for their retaliation. You can’t avoid being competition for them, but you can control to some degree what form that competition takes, and in what area.

Leadership and structure

What happens if you reach 500 employees and find that you aren’t actually capable of being the boss of so many people? What if the structure of the business doesn’t suit so many? When you have 500, how do you ensure that each and every one of them holds the same values? How do you ensure that everything remains clear to everyone when everyone isn’t talking to each other like they did when you were a team of only 5 or 10?

Consider the structure of the business in general and specifically of the leadership. Additions and alteration may need to be made, and you don’t want to be caught completely unprepared. Set down things like priorities, your business’s culture and values, etc. - things that didn’t need to be before because the whole team just knew or felt it. Otherwise, you will find the overall feel of the business will change too much.

No matter how prepared you are, there will always be challenges you don’t expect. The main reason for this is, simply, people. There is no predicting how individuals with the ability to affect your business will behave. Perhaps a supplier will stop giving you discounts because you are bigger now, or will start giving you discounts so you take them with you on your rise to the top. A random hacker may decide to mess with your systems. A disgruntled customer may inflate their problem and try to cause you as much trouble as possible. There is no accounting for people, and that, more than anything, is why you must always be ready to deal with the unexpected. 


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Published on: 26th February 2017

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