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Today, entrepreneurs are still encouraged to grow a business of their own, despite the challenges of beginning a company or reading stories of startup failures. To put it simply, it isn’t easy to build a startup and grow a team that will succeed.
I remember when I was trying to build my first startup, I was always focused on two goals: chasing customers or chasing key performance indicators (KPIs). And when I finally focused my energy on other parts of the company, I observed many things were actually tearing it down.
For example, the team wasn’t as passionate as they used to be, which left me wondering if I was doing something wrong or if I hired the wrong people. I soon realized that I can’t expect team members to hold my level of dedication or passion if they and the company aren’t set up for success. Eventually, the company came to an end because we were not able to hold our doors open with the current processes in place. I ended up moving to Silicon Valley and started volunteering to consult other companies on how to fix their businesses, based on my failure.
I’ve learned a lot throughout my experience with my own startup and as a consultant to others. Below, I’ve outlined four reasons I believe your startup’s growth might have reached a plateau:
You’re stopping at the product-market fit.
Product-market fit is when you are able to build a loyal customer base through your product or service. The customers love the product, and you are also building streams of income with what you’re selling. But at one startup I worked with, we realized that there were many customers within the market who loved what the company did, but the market was too small for them to truly build a business out of it. If you’re in a similar situation, don’t stop at product-market fit. Try to find larger fits as well.
To do this, survey audiences from different niches, and see how they interact with your product. You can also experiment with online advertising platforms to see how they perform against the market you are wanting to target. Another one of my favorite ways to survey audiences is by simply arranging dinners and asking different segments.
You’re not putting your company on the diet it needs.
If you feel that cash flow (or lack thereof) is increasingly becoming an issue, focus on trimming down the company to become more sustainable. I’ve observed that many founders’ first inclination is to get rid of their marketing and advertising departments. But these departments help draw people to your brand, so don’t instantly cut these teams.
Instead, start small with the trim-down process, and work to understand the value each of your team members brings to the table. Think about whose roles are essential and whose are not. As you’re determining this, don’t create the expectation your team members can and should overwork themselves. In my experience, this can cause them to start resenting the company and become frustrated. Consider letting team members go if they are no longer essential to the team, and for those who stay, build a success road map that helps them advance to the level for which they aspire.
You’re only focusing on funding.
I see many startups focus on raising funding, rather than setting up processes that could help them in case they are acquired. When you set up your company with the idea that you might one day be acquired, I believe you can help set the company up for success because you will be establishing certain processes that help your company run smoothly, such as a plan that employees can use to train and onboard other people. In my experience, creating these types of processes also means involving the top leaders of each department to help you make decisions down the line and ensure that you are not the only decision maker at your company. It will require your leadership to evolve because you will have to start trusting someone else in the company with the decision making process.
One of the biggest mistakes I’ve observed startups make is not having the right systems in place. I’ve found that these systems can accelerate your startup, whether or not you are acquired. The cost to do this might be high at first, but it will be worth it as the company grows. For example, when you have a marketing automation system in place, you’ll be able to handle all the marketing activities from one place and grow a database of interested prospects. If your only focus is on raising funds, you might be in the dark about what your company truly needs to function smoothly.
Your team lacks balance.
I’ve worked with many startups that felt their team members weren’t as dedicated as they wanted them to be. But as I tried to see things from both perspectives, I developed a different idea of what dedication was. I always encourage founders to keep their focus on balanced lifestyles and be more accepting of others. Respect that your team members have lives outside of the work they do for you. From my perspective, it’s OK if they have a side hustle because this will help them meet the needs of their own lives. I’ve found that many founders become more interested in the company’s goals, and they forget to prioritize (and encourage) balance.
If you begin seeing things falling apart in your young company, I believe the above insights can help things fall back together and get your budding business back on the right foot. You’ll likely see some challenges along the way, but remember that there are things you can do to help your startup experience growth and find great success.
April 26, 2019 at 08:36AM
Forbes – Entrepreneurs