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Your team has been working at breakneck speed for months to build and refine your product idea, with feedback from early adopters. It’s going well, but it’s the way it is. A lot. Work. The team is in a double state of exhaustion and excitement. User retention is growing. You’ve built a product that you’re sure people will love. Investors are noticing this and talks are moving towards financing for the next phase. Success is on the horizon. It’s so close you can feel it.
If this sounds like something to you, congratulations! You have overcome major hurdles to get to this point. For many, a new clock starts the moment you get that funding: new features, new employees, new users. The next growth stage.
But have you really thought about what will happen if you double or triple your team size to meet the growth requirements? Do you now have the right team to support this growth? The right infrastructure? The right culture?
Can your business scale successfully?
For early stage startups, warning signs appear along the way, but they are often ignored. We say things like “culture doesn’t drive acquisition,” “it’s not important today,” or “we’ll fix it when we get there.”
I’ve seen startups make their way through the transition from early stage to growth stage. Those who avoid long-term critical missteps are those who start planning their growth early and intentionally. They bet on their own success by prioritizing the work that ensures the company is built to scale.
If you’ve reached this major turning point in your startup’s growth, keep an eye out for these warning signs that you may not be ready to scale yet:
Your backlog grows exponentially with technical debt.
There’s no easier way to say you’re going to have long-term growth problems than a technical debt backlog that you never seem to have time for. Technical debt is a normal, expected maintenance for any product and should not be put off on the back burner, sprint after sprint. If you’re struggling with this problem, there are likely two causes (sometimes both): you haven’t prioritized a sustainable process to sustain this debt, or your product is unstable.
You can fix this by talking directly to your team and getting their feedback on how they feel about technical debt. Is this a prioritization issue due to unrealistic feature development deadlines? Give them space to prioritize. Does the team feel that the product infrastructure is reaching breaking point? Evaluate the pros and cons of a refactor versus a rewrite.
During growth, your startup is slow to release features.
If you’re slow to release features and improvements, you’ll frustrate teams and users alike. This is often a cultural problem of trying to solve too many things at once.
If you haven’t already, you should follow continuous implementation best practices, including breaking down features into small, valuable steps and getting things tested as soon as possible. Fully embrace agile and iterative development now, not later.
Your data is unreliable.
Quantitative data is not helpful in the beginning. Suddenly your product has enough users to make data useful. There is nothing more frustrating than not having confidence in the accuracy and integrity of the data coming out of your platform. This is a common problem for startups that don’t prioritize separate sources of truth about data and end up with conflicting, cluttered information that makes decision-making nearly impossible.
So, how can you avoid this? Invest early in a customer data platform (CDP) like Segment that helps you collect, clean and activate your customer data. Trust me, you’ll thank me later.
You don’t stay focused on the measurements that really matter.
Yes, data is important when scaling. But it can also provide an overwhelming amount of information that makes it difficult to gain meaningful insights. This mountain of data hinders decision-making and distracts from what really matters.
Be clear about what data you want to measure and at what stage of growth. For most growing startups, retention is the most important measure of a successful product. It’s the best measure of understanding that you’ve created a product that people will find useful and that people will fall in love with. Other metrics are needed to sell investors, but don’t lose sight of building a product for your users. Without them, you don’t have a product that is scalable.
You have more marketers than engineers.
A surefire way to know you’re focused on the wrong metrics is that you have more marketers than technicians. Acquisition – getting new users to try your product – is much easier than getting them to stay and love your product. Hiring too many marketers early can increase your visibility, but it won’t help you keep your product if your product can’t support the needs of key users.
If you see this imbalance in your team, consider reallocating your dollars to building a healthy product team that can deliver features consistently and keep user retention high. Make sure you have enough engineers for the team to feel comfortable before your company invests more in marketing, until your company reaches later stages of growth.
You have no formal product strategy.
No one wants to take the time to write a formal product strategy. I understand. It takes time, it takes (sometimes frustrating levels of) collaboration. And the nature of startups is that they run, which sometimes makes creating a strategy seem pointless and pointless. But I promise, it isn’t. Smart product companies do this even if they don’t talk about it publicly.
During this growth transition, have the dedication and determination to document your startup’s strategy and make sure your team understands it, can interrogate it and build on it.
Your product team is not multifunctional.
Many product startup organizational structures are based on resource or financial scarcity. As a result, they build a product culture that is either strongly engineering-oriented or strongly design-oriented. Product management is usually completed by the business owner, if it is considered at all. This can work in early stages. But as the company grows, so does the need for maturity in the composition of the product team.
To improve cross-functional collaboration, refocus your product team leadership to include a product manager, engineering leader, and design leader (aka “the trio”). Each should collaborate equally on decisions that ensure that technical needs, business needs, and user needs are all considered as the product and its processes mature.
You don’t write things down.
If your processes, culture and way of working all live in the spirit of the small team you currently work with, scaling up will be painful. This works when a team is small because people understand norms because of the nature of how closely they work together. But when startup growth happens and departments are silos by nature, it’s impossible to maintain. Conscious growth involves deliberate documentation of what is important to the business. Without it, cracks will form in the culture and become a much bigger problem later on.
“Just enough process” and “just enough documentation” are my two favorite mottos. Start by writing down the most important things you want people to be responsible for: your values, processes, strategies. Over time, encourage team members to do the same.
You have no plan for your culture or organizational evolution.
Once investor dollars hit, it becomes the second phase of quick work to hire a team — sometimes two or three times its current size. Not doing this with a plan in mind can cost you exponentially in the long run. Culture can change drastically and cause conflict between old and new employees. The team you currently have may feel alienated and frustrated by this growth. Leadership engagement needs to change to support a large company rather than the small, tight-knit group it once was. You can intentionally drive this culture or you can let it happen to you.
Sit down with your current team and map out the future phase of the company. Talk about the culture. What do you want to keep? What do you want to change? How will roles change? Who will take on the leadership roles as company ownership shifts to more formal C-level leadership? Engage people in the excitement, fears, and other emotions of your startups surrounding this growth. Make a plan in which everyone feels involved.
When people talk about startups, they often focus more on the challenges that early-stage startups face: building the MVP, reaching a suitable product in the market, and securing funding from investors. Understandable, right? Without passing this stage, there is no future, so there is good reason to stay focused on the here and now.
But this tunnel vision can make the transition from seed to scale that much more painful and put even the biggest ideas on the line. Data from the Small Business Administration shows that the startup failure rate is around 90%, with 21.5% of startups failing in the first year, 30% in the second year, 50% in the fifth year, and 70% in the first year. their 10th year.
Startups are at greater risk of failure as they grow. Don’t let a short-sighted focus cause your team to lose sight of the long-term vision: a sustainable product and business that will continue to thrive well beyond MVP.
Summer Lamson is the chief services officer at DockYard, a digital products consultancy focused on helping innovative companies scale across the nexus of technology and design.
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This post 9 Warning Signs You’re Not Ready to Scale
was original published at “https://venturebeat.com/2022/03/27/9-warning-signs-you-arent-ready-to-scale/”