From Founder To CEO: Navigating The Challenges Of Scaling A Startup

Founder-CEOs take an essential role in the organization for growing and taking the company a notch higher. They’re usually convinced that they’re the ones most capable of leading and scaling their startup and should remain in control of the companywide operations.

And they’re partially right because evidence suggests that companies with founder-CEO leadership get an almost 10% higher valuation at the time of an IPO than non-founder-CEO leadership companies.

Like other founder-CEOs, I’ve dealt with two phases: The first is when you build a truly great product that people love and appreciate, and the second is when you build a great team of managers and executives.

Both of these phases involve several intrinsic challenges that founder-CEOs need to overcome to successfully transition from one phase to the other while scaling up their businesses.

But how do you know if your startup is ready to scale up?

Is Your Organization Ready To Scale?

What most startup founder-CEOs fail to recognize is if their organization is ready to scale or not. This is often the most overlooked question, as many never consider it while planning business expansion.

But the simplest way to determine this is to ask yourself if you have a proven business model or a product that performs well. If you do, the process of scaling up gets a little less complicated but it’s not yet streamlined (and I’ll tell you why).

From this point, you can take two approaches to scaling your business: expanding into other geographies and developing new products to target new markets.

However, if you have a dysfunctional business model or no way to monetize your product, thinking of scaling up doesn’t make sense. In other words, don’t scale if you can’t get enough customers who are willing to pay for your product or services.

The Process For Successful Business Expansion

Without a doubt, scaling up comes with its own complexity when expanding to new geographies or other product markets. You have to be concerned about the handling of operational processes in different regions and establish new management hierarchies.

For instance, faulty leadership could consume too much time on human resource management, such as turnovers, which might delay product development and new market launches.

Because not enough time is allocated for the functioning of the core business, it could negatively affect your business expansion plans.

However, the right processes employed at the right time can help ensure your business sees the light of day in new markets. Here’s the process I followed to navigate the challenges of expanding into new product markets:

1. Get a stronghold on your information flow.

The biggest challenge businesses face is when the flow of information is interrupted. Keeping communication smooth within a small team is fairly simple.

For instance, when we began the development of Textdrip, we employed a small team that consisted of a front-end and back-end developer, one QA employee, one graphic designer and a core architect. The biggest advantage of having a small team was that communication remained streamlined.

However, as we expanded and hired additional developers, designers, programmers, QA staff and marketing professionals, it became difficult to ensure that necessary information was getting to the right people.

So, we established internal communication measures like management meetings, monthly meetups with offshore teams and email updates to keep everyone in the loop. We also began using established collaboration tools like Slack.

You can follow similar processes for your organization to get a stronghold on your information flow and ensure that communication flows in all directions and not just top-down.

2. Refine your message according to the market you’re entering.

An important part of scaling up your business for new markets is in how you promote and brand your products or services. Replicating your brand’s image from an existing market to a new one can be difficult, especially when you’re entering a new country.

Being an active member of the entrepreneurial community, I’ve closely inspected several brands that scaled up successfully. The reason they were successful was that they had skillfully aligned their branding and marketing messages to the target market’s needs.

Along similar lines, it’s important for founder-CEOs to accommodate the customer preferences of the new market to scale up their businesses successfully.

3. Give importance to hiring the right managers and team members.

One thing I learned from hiring new team members and managers is to get the right people with the right skills and experience. Hiring managers and team members can have two effects on your organization:

• If you hire great managers, they’ll help ensure their team performs the best, which ultimately can improve your bottom line.
• If you hire great team members, they’re going to perform their best in any case, which also aids in your business expansion efforts.

Apart from that, you want to hire managers who know the target country, understand the needs of the target audiences and are catalysts for your expansion plans.

Conclusion

Remember, scaling your startup comes with its own challenges and pitfalls, but the right mindset and approach can help you overcome those to successfully expand your business. As a founder-CEO, you’ll be heavily invested in planning and executing your company’s expansion plans.

To do this successfully, you’ll need to conquer your fears and apply lessons learned from other founders’ journeys.