Premature Scaling

So, your company is funded, has a working product, clients, and revenue. On the surface, it would seem like you were growing fast and moving toward the right trajectory, right?

The next train of thought would be that the low level problems have been overcome and now its just a case of making everything to go faster and the end result will be growth, right?

Timing is critical. Too slow to grow means paralysis and a potential loss of market position - but that's another story. Too quick to grow is what this post is really about - and scaling too quickly will kill your company.

Growth

Growth can be one of two things, organic or forced. Forcing growth is a fine line between genius and disaster. The newly-formed theories around growth hacking don't negate the dangers around forcing a company into a cycle of operation to generate revenue without having other aspects of the business in a position to take the strain and maintain the companies ethos.

Slick versus Scrappy

Putting a shine on the companies outward persona seems like the right thing to do. Attending high profile events and conferences, having a large stand or presence at a trade show or using expensive locations to promote your company feels like your lifting your new start-up out of the mud and into the light. This slick and managed step-up puts the company into a new competitive pool of other companies with the same "slick" approach. Upping your approach could easily create more competition or place the company in a more competitive environment.

Scrappy does not mean unprofessional. Scrappy means not being afraid to show you're the new kids on the block and looking to challenge the established paradigm. For companies who have the early adoption mentality this can be extremely attractive.

Keep it scrappy

Trying to scale prematurely is often orientated around attending expensive conferences and trade shows, flights to meet with clients, multiple people in the biz dev team, ego driven decision making processes and 3rd party relationships that go beyond the companies natural levels to operate effectively.

The risk is that growth is placed before the products development or stability. Most early stage companies need to create a scalable customer acquisition channel prior to anything else growth related.


1. Growth has a strict relationship with everything else
There is a ratio of the team that should be working on growing the company. Dependant on sector the ratio should be somewhere between 12% and 18%. If you end up with 20%+ of your current team working on the biz dev then it can end up being counter productive.  If the growth team is good it can vastly increase customer acquisition even though there could be little idea who customers are and how much they are willing to pay. Until there is a predictable, scalable customer acquisition method, there is no need to aggressively grow the biz dev function.

2. Concentrate on customers on-line opposed to going through a lengthy sales cycle. Selling to enterprise level clients can be time consuming and expensive. The strategic decision to go after these large companies(which is hard not to see as the correct choice)is not dependent on a large biz dev team and can definitely be infiltrated in a more scrappy way.  The business rationale behind spending a large budget on conferences and trade shows to acquire customers is contentious. "Chase hard" is a common haiku for start-up sales teams and can be effective, its possible to acquire good customers via this method, but this could have been equally successful if these enterprise clients had been targeted via LinkedIn or email.

When you’re an unproven start-up, you’re looking to find the clients that have a first-mover mentality. These are the types of clients that are forward thinking and will respond to your LinkedIn approaches or emails.

3. Don’t hold any kind of inventory
Don’t buy it until you have sold it in advance.

4. Product and Customer Support are the priority
A common train of thought is to chase the marquee customer for your product or service and thereby gain notoriety and market position. A kick-ass testimonial from a large corporate or celebrity is a happy nirvana for most start-ups. The key is to focus on making the product exactly right for your big client before moving onward to approach others, not treat their early endorsement to mean that the product is "finished" or "market acceptable".

What should be done is to focus the company to buckle down and make the best possible product for their early adopter. Using any early adopter as a testing ground to determine how to effectively capture users and how to seamlessly integrate with any 3rd party systems so that there is never any product or service downtime. Once any product functions well (it doesn't have to be perfect), it should be the case that the company can target other similarly profiled organisations as with the early adopter - citing them as a testimonial. Additionally, this also acts as a template for a customer support model for the early adopter which would allow scale to other clients. 

What's the skinny?

Don’t scale until you’re ready for it. Cash is king, and you need to extend your runway as long as possible until you've found product market fit.

Why oh Why!

I've always understood social media like Facebook and Twitter to be a double-edged sword. Everything I post can bring out the best and worst in people and I need to be prepared for someone in my network to not like what I've posted and comment accordingly. I've always been quite thoughtful over what I post, I don't post personal information, I only publicise trips after the fact and I don't comment on sex, politics or religion. This has largely kept me on the safer side of things - but this is a reflection of my age and appreciation of the issues posting on social media can cause.

Younger generations have bigger problems with this than I do. The impetuous nature of youth means that often they post something that later will come back to haunt them, especially when it comes to pictures. What seems amusing at the time often is embarrassing after the fact and the sharing nature  of the internet means its difficult to hide what you've done after the fact.

So if you've posted something in a drunken haze and the cold light of day leaves you with a need to get rid of hide something, what are your options?

Facebook

Facebook tends to be the daddy when it comes to making those embarrassing mistakes that follow you around. Outside of manually removing every post, deactivating your account is the only way to get rid of your entire Facebook history. Mozilla users can access some add-ons that help with this.

Even then there are things you can't delete. Facebook logs a lot of data, like which adverts you've clicked and the IP addresses you've used to log into the site.

But what you can do is completely restrict who is able to see old content.

You can do this by limiting the privacy of your past posts through the settings tab. With one click of a button this privatises old photos from the times you were more relaxed about posting things. This doesn't actually delete any of your history, it just stops people seeing it.

The settings option can also allow you to view your profile, to see it as other people do, so you can see what friends might see. Remember to check the pages that you liked! There may be a few embarrassing ones in there. Events you are attending may be worth looking at too, especially if you're avoiding someone.

Through the privacy check button you can also see which apps use your Facebook account. This is very important. If you don't trust any of these apps with your data, don't give them access to your Facebook profile.  You can restrict what data it can access (you may not want to give them your address or phone number) by adjusting your app and game settings.

Twitter

It's a bit easier to remove old tweets. Twitter in general (As a company) has a better stance over removing content that other social networks. I sometimes feel that Twitter is more dangerous than Facebook because the velocity that Twitter moves at means that an unfortunate tweet can travel further quicker than other networks. A classic example is the tale of Justine Sacco - read her story here

You can delete old tweets from your timeline using TweetDelete

If you're particularly paranoid you can also set up a rolling auto-delete so that your old tweets are constantly deleted.

Instagram

There are no easy ways to delete old Instagram posts simultaneously but there are a few ways to keep your posts private and limited to yourself and approved friends.

You can change Instagram to "private" by going into the options (this won't affect the followers you have already) but you can also make sure you aren't geotagging your posts so that people can see where you are - or have been.

iOS phones can do this by going into the settings, then privacy, before selecting location services and then removing Instagram's permission to access your location by toggling it to off. It's also important to deselect "Add to Photo Map" before you share a photo.

Summary

There has never been a greater need to manage your on-line profile and persona. Your next job or relationship might depend on it. Its hard to hide those mistakes in the digital realms - so the better strategy would be to not make them in the first place. I've been there, done that, got the t-shirt. You don't need the same t-shirt.