Top Startup Scaling Challenges

An almost strict necessity to handle numerous challenges scaling a startup is a bitter reality for many modern companies to face. The thing is, the rapid and restless development of the IT industry makes it quite difficult for startup teams to keep their business concept constantly up-to-date. This is why they may require the help of an expert to make a product truly ‘useful for TA and competitive’. We suggest going deeper into the challenges of the scaling-up process for startups – we will share with you some expert recommendations on how to overcome them most painlessly.

Scaling in startup lifecycle

Generally speaking, the lifecycle of any startup consists of 5 consecutive stages:

  • detection of an issue and suggestion of its solution;
  • the creation of a minimum viable product;
  • introduction of a product to the market;
  • scaling;
  • formation of a ‘mature, established project’ status.

From the list, you can see that product scaling leads to the following acquisition of the ‘leading company’ image, which means not a simply competitive establishment but a top player or leader in the niche.

Scaling phases

Startup scaling includes three major phases:

  • detection of workflow processes suffering from a lack of performance;
  • search and hiring of experts for enhancement of workflow;
  • forming a new strategy, efficient primarily in terms of project scaling (we strongly recommend checking out Brian Balfour’s video – Building a Growth Machine).

The second phase can be challenging to realize to the fullest extent. The helpful solution would be an involvement of the specialized software and/or hardware that would automate certain complex aspects and facilitate the working routine.

5 biggest challenges of scaling for startups

Now, let’s take a look at 5 greatest challenges startups face when scaling – gotta know your potential hardships in the face.

  • Subdivide scaling into less global subtasks. Such practice will help you understand where there’s a need to employ third-party specialists and where you can handle everything with the collective effort of your team members (as we’ve already mentioned, perhaps, some work processes could be automated with the help of the special software or hardware);
  • Prioritize tasks. By prioritizing everything, you’ll be able to conclude which tasks simply cannot be delayed (e.g., because of the long time required for their completion).
  • Consider automation solutions. Automation can help you solve about 80% of issues related to the labor resources shortage. Yes, solutions from the niche cost good money; yes, to deploy them, you’re going to need dedicated experts. Nevertheless, the affair is worth the expenses and an automation app you employ will fully compensate itself in the long run.
  • Plan the workflow of team managers. Large working groups consisting of more than 5 people dedicated to intellectual labor work less efficiently than those limited by 5 or fewer members. So, consider this – maybe it’s better to start scaling by expanding the managing staff.
  • Search for experts. The most difficult task – the search for new competent employees. Obviously, in order to ‘upgrade’ your staff without harming the existing business processes, you’ll need to:
    a) find an employee in your existing staff who would be a kind of a mentor for newbies;
    b) organize the means of interaction between new and old members of the team without affecting their primary professional routine (especially, if we’re talking about fresh remote employees).

The reality is that during project scaling, each existing employee is swamped with the company work, so they are introduced to new flows of business slower and less productively than it’s initially expected. Let’s continue with discussing the issues of introducing new manpower to the company.

Why is it dangerous?

Theoretically speaking, your time, money, and own effort investments may as well turn out obsolete – the qualification of the hired specialists can, in reality, be insufficient, for instance, or necessary downtimes can lower the quality of customer service, making people refuse any continuous cooperation. All of these scaling challenges for startups, however, can be prevented.

In particular, in order to work with highly professional experts only and scale a project without distracting your current staff from existing workflows, we’d recommend you to avoid wasting time hiring each employee separately (doesn’t matter remote or in-house). The optimal option is to go straight to the well tried and tested outsourcing agency. It will provide you with a fully formed collective of workers who, once all of the nuances are settled, will get to working on the task immediately. They also won’t need any mentors – neither from you nor from any of your team members.

Examples of successful startup scaling

Below, we suggest you get familiar with 5 world-renowned projects that scaled successfully despite their initially humble registered capital.

  • MailChimp. Most everyone must be familiar with this service with a postman chimp logo (postchimp? Yeah, mailchimp sounds better). Not many know, though, that the initial concept of the CEO of this startup – Ben Chestnut – was to create a universal solution for commercial web platforms that would help with an email newsletter configuration. Nothing more. Eventually, the startup team raised the capital comprising $400 million.
  • Lynda. Lynda is a company with the $1,5 billion capital that provides online education services for software developers and web designers. Back at the end of the 90s, though, the project was nothing more but a concept of a teacher Lynda Weinman, who was simply composing lists of educational books and producing video lessons for her students.
  • Shopify. It is no secret that initially Shopify was designed to be an eCommerce solution for the snowboarding equipment and apparel distribution. Although it eventually failed in the niche, the company decided at one point to present their unique product to other business owners as a means for building authentic eCommerce projects. A few years passed and after successfully collecting the venture capital and conducting an IPO, the platform acquired the status a quintessential product in the niche.
  • Ipsy. The Ipsy startup was founded by a famous beauty blogger Michelle Phan. Due to her huge popularity, it was fast to become a competitor to the ancestor of the service, which distributes ‘beauty loot boxes’ with the make-up selected according to individual skin features, age, hair type, and customer preferences. We believe that the key part of the success here was the extremely huge popularity of Michelle on YouTube.
  • Unity. Perhaps, any gamer or person close to the video game development industry knows about this engine. Unity, also, used to be a low-budget project initially. The proper positioning alongside the knowledgeable approach to the investor attraction played the key role in making Unity one of the strongest players in the market. Today, the company budget comprises over $1,5 billion.

Tips on how to avoid mistakes

Last but not least – three utterly efficient in our opinion recommendations on avoiding mistakes during scaling a startup.

  • Don’t rush opening a number of vacant positions. Work employment and acquaintance of new employees with the specifics of work is a felt stress for a company. Unless until it reaches an international or, at least, regional level. So in order to avoid slowing down several product development/service establishment stages at once, we strongly recommend opening vacant positions gradually, department by department.
  • It’s better to overpay qualified experts than to waste time teaching new candidates. Perhaps, this tip will seem rough to some. But if we’re talking speed (startup scaling is directed exactly at accelerating the overall performance), then hiring new member with the basic level of knowledge isn’t the best idea.
  • Keep in mind that some modern apps can fully replace human labor resources. We’ll repeat ourselves once again here: conduct a research as for the business automation software online at least from time to time. It’s quite possible that certain solutions will eliminate the necessity to expand your working staff.

Conclusion

Let’s summarize. As you can see, startups scaling challenges can be overcome, especially, if you are consistent enough in your approach to doing so. If you come to a realization that this process isn’t possible to implement without a separate self-managed team of experts, let us help you! Our guys will handle tasks of any complexity and do that as fast and reasonably priced as possible. Fill out the contact form on our website if you want to discuss the details of our future cooperation and we’ll get back to you soon.