by Ivan Kohut, CTO & Co-Founder of Perfectial
The web is filled with advice for startups. Rules for getting funded, ways to promptly crank out an MVP – you name it; every question an aspiring businessman might have is answered in-detail, in blogs, ebooks or whitepapers.
However, there’s hardly any info about what to do next. How does a firm ensure growth after it’s gained some market traction? This is a question that is ultimately very important for entrepreneurs to know.
As a seasoned full-cycle software development company, we’ve helped quite a few startups take off. We’ve assisted them throughout each step of their journeys toward expansion. We’ve observed the common challenges new companies face and worked with the founding entrepreneurs to help them figure out the next steps to getting ahead.
Today, we’ll share with you a few of our insights.
Understanding The Difference
The first thing to remember is this:
It’s best for a startup to stay flexible and free of formal hierarchy in order to succeed early on. It’s impossible for a new business to evolve into a prospering company without establishing strict discipline and structure.
The course of your startup might change. The initial concept of your product (or service) might require adjusting. Sometimes you’ll need to completely change your business to meet the needs of your target audience or to reflect changes in the market in order to keep up with competition. Therefore, it makes sense to keep your firm loose in terms of organisation in the beginning to sustain an informal working atmosphere and eliminate all sorts of bureaucracy.
Bringing a business to the next level requires an entirely different approach; a mid-stage company (just like its founder) has to become more mature. It can’t be ruled by an enthusiastic visionary who often goes with his gut. The company requires a prudent man of business to steer the wheel, who acts according to plan, oversees direction, knows how to mitigate risks and thus ensures continuous growth.
Here are the few rules you should live by, as a startup founder:
#1. Hire New People
When it comes to laying a foundation for a firm’s growth, nothing is more important than putting the right people in charge. New tasks will ensue as a company grows bigger. Inevitably, there comes a time when the amount of tasks will outgrow the business owner’s ability to effectively cope on his own or with the original staff.
At that point, hiring new people becomes paramount.
Startup founders rarely have an HR background and are inclined, typically, to populate a company with friends and acquaintances. Founders are often reluctant to create a formal hierarchy, as it seems to them a threat on intimacy within the firm.
That’s something we advise strongly against. You must apply an elaborate recruitment process and create precise, competency-based job descriptions to fish out the experts who suit your firm’s needs. No other means can drive your company’s performance better.
#2. Get Help, As Much As Possible
As your company undergoes a rapid metamorphosis, you should be improving too. Otherwise, the list of responsibilities you have to assume will grow to be overwhelming.
Generally, CEOs at mid-stage companies do this:
- Oversee the overall direction of the company
- Assess its business needs
- Ensure proper market positioning of the company’s products
- Create and maintain a proper corporate culture
- Mitigate business risks
- Set up an efficient infrastructure within the company
Mastering such a broad set of skills isn’t an overnight affair and one should use all the assistance available to quicken it. Listen to the people around you – the professionals in your staff, your funders and of course, members of you corporate board.
Experienced venture capitalists know how to prepare a growing company for scaling; they’ve seen the whole scenario unfold multiple times before. So, for the sake of success, listen intently, let them educate you and maybe, curb your entrepreneurial enthusiasm a bit. It’ll be worth it in the end.
It is exciting to do different sorts of work, we understand. It never gets boring that way, the variety keeps your passion alive and makes your entrepreneurial juices flow. Being the jack-of-all-trades as a company’s leader might do fine in the beginning. Maintaining this role will however, will for sure lead to miserable failure once the firm grows.
Everyone has strengths and weaknesses; the goal is to realise precisely what they are. Ask colleagues, funders, anyone to evaluate your hard and soft skills, find out where you fall short and then let others fill your gaps.
You’ll need to let go of the generalistic approach and assign specific tasks to specific domain experts. That’s the only way to handle the ever-increasing complexity a growing firm is bound to face.
#4. Find Helpful Tech Assistants
Reliable software vendors, like Perfectial, already have experienced software developers under their roofs, i.e. QA engineers and project managers. They examine the skills and knowledge of their staff regularly and ensure constant improvement and diversification of their expertise. They do this, so you don’t have to.
So, do your research. Find out which areas particular software vendors specialise in, check feedback from their former clients, and if the expertise one of them offers fits you, delegate the burdensome technical implementation of your concepts to that vendor. Once free of a need to look for experts, you’ll be able to focus exclusively on growing your business.
How It Should Be Done: Preparing For Growth The Right Way
Ayasdi, Perfectial’s long-time technical partner, is a startup built around the scientific work of one man – Stanford’s mathematician Gunnar Carlson.
For over 30 years, Gunnar and his colleagues had been working on conceptualising topological data analysis when in 2005, Stanford University received $10m in grants from US government agencies to research how TDA can be applied to solve real world problems.
Gunnar, the principle investigator on the research, invited a fellow mathematician Harlan Sexton and later his student, Gurjeet Singh, to work on the project. Together, they founded Ayasdi in 2008.
After receiving $2M of seed money in 2010 the company started to grow rapidly; it got another $10M in Series A investment round (2012), $30M in Series B (2013) and in 2015, when the Series C round took place, Ayasdi received $55M of investment funding.
The firm, comprised initially of a few mathematicians, has been able to scale efficiently by implementing a robust management structure, bringing in experts from outside and sustaining high cultural values.
Currently, Ayasdi works with various Fortune 500 companies, leading research institutions and governments. The company employs 200+ people and cooperates with Perfectial, the prominent software vendor, to launch Modeler. Modeler is a financial app that helps banks and other financial institutions worldwide move from raw data to impactful business solutions.
Have a question about startups? Contact us at Perfectial, we’re ready to help!