Startups typically plan for growth in a few ways. Some common methods include expanding their team, marketing their product or service in new ways, and developing new features or products. Additionally – and that is the most common understanding of growth it seems – startups often look to raise additional funding to support their growth. Yet, raising a VC round does nothing say about how they want to achieve growth, it’s just an indicator that someone has believe in their proposed plan they pitched at the meeting or that they can make them grow with the experience of the funds operations team.
The first step for any startup looking to grow is to assess their resources and current capabilities. Once you have a clear understanding of what you can and cannot do, we can begin to develop a plan for growing your business. This plan will include specific goals and objectives, as well as a timeline for reaching them. Because in the heat of the debate and daily business the startup is often the one being forgotten and it is the plan that is basically the voice of the startup at the table: when everybody is raising their concerns at the meeting, the pre-agreed upon plan is the silent voice keeping us reminded of the actions we need to have taken at the end of the quarter.
When resources and capabilities are so important for growth, then a big part of achieving growth is hiring the right people. Scaling the capabilities of the founding team so to say. The startup must identify what skills and experience they need in order to reach the next order goals and then find employees who possess these qualities and who fit to the culture. While it is important to create a positive work environment that encourages creativity and innovation for achieving growth, it is much more important to have the people with the right mindset and comfortability with fast-changing strategies. Everyone can get comfortable with a face pace, but few people are trained to be comfortable with a fast changing environment where yesterdays priorities have changed overnight and new insights put last months efforts in the lowest drawer.
Marketing is the key factor in growing a startup. The company must identify its target audience and craft a marketing strategy that will reach them. Not in the sense of advertisement and branding and all of the things that everybody seems to think marketing is. But in the sense of market and market participants.
When asking startup founders what things they are thinking most about, when planning for growth most startups consider the following:
- The number of available resources
- The number of possible consumers and customers
- The amount of available capital
- The amount of available labor
- The amount of available land
Overwhelmingly these are all market considerations.
When looking at forums and the YC startup school lectures, one can get the sentiment that the most thought about part is finding a co-founder and the right co-founder. Either those never make it, or make it in a very small number or they quickly realize that startup growth is about
And so these quickly change to market considerations. There is a reason for that dictum in startup world: Fist time founders care about product, second time founders look for distribution, i.e. markets of distribution.
So what can we put on record so far?
When planning for growth, startups must consider a number of factors such as the amount of available resources, the number of possible consumers, and the amount of available capital. They also need to develop a clear vision and strategy for the future, and ensure all stakeholders are aligned with this vision.
What kind of challenges do they face when planning for growth?
1. Determining the most appropriate areas for expansion, taking into account factors such as market potential, resources and infrastructure availability, and the ability to execute the plan in a timely and efficient manner.
2. Securing the necessary financial and human resources to support the growth plan.
3. Balancing the need for growth with the need to maintain established business processes and controls.
4. Developing a corporate culture that supports and encourages growth.
5. Establishing a clear vision and strategy for the future, and ensuring all stakeholders are aligned with this vision.