This week I attended the TechCities Awards; a cauldron of highly ambitious startups making a serious splash and accelerating with pace towards scale-up. As scale-up becomes part of the startup lexicon, the award for Scale Up of the Year went to the trailblazing Blockchain.
But what are the steps you need to take to move from startup to scale-up?
The opportunity – is it scalable?
First questions an investor will ask: “Is your startup scalable?”, “Is there a market big enough to scale this opportunity?” and “Are you being realistic about the achievable market?”
Analysis of scale might not be a key factor during the early stages but, if you have aspirations for Series A funding and are chatting to cuddly VCs, then they will expect a substantial return – and that doesn’t come from small markets.
Fail fast, learn quick
Your model needs to find its feet before it can scale.
This process is often about failing fast, learning quick and arriving pretty damn quick at a model the market actually wants. Iterate quickly and don’t hold on tightly to your initial ideas. It’s quite possible that your “back of fag packet” startup idea will need to morph into something quite different.
Avoid suffering “death by a thousand cuts” and holding on too long to a model that doesn’t work. Trust me, I’ve done that.
The model with the best potential to scale will be shaped by market reaction so, test constantly, survey and engage to gauge the changes required; test, iterate, test, fail, test, learn.
The marketing t-bar
Testing the most effective marketing channel is another learning process as you understand the best channel for customer acquisition. Investors need confidence that you know where to cost-effectively find the gold.
Part of this process is to avoid vanity metrics. Don’t turn up with page views, visitors, time spent on site, impressions and other data, without understanding what they mean and how you change them.
Key triggers to scaling growth
Some of the fastest growing businesses out there share certain characteristics around their marketing and these innovative channels are key to scaling growth.
Paid acquisition gives you the ability to reach out directly to new customers and convert, without any real traction in the market. You can also test out landing pages, offers even diversification by placing different ads at different times. This was key to getting LawyerFair off the ground in our early days but boy oh boy, it’s expensive, particularly when competing in professional services.
Whilst you’re inclined to use it heavily during the early days, it can become an expensive addiction that you have to wean yourselves away from.
SEO is another miracle solution. Yes it takes time and doesn’t happen overnight but wait for the magic to unravel. Users start to arrive with comments like… “Saw an article you wrote”. That article, the one you wrote in the wee small hours, that you never thought you’d get a return on… it only came home!
Read more about getting to the top of Google:
- Five quirky ways to get to the top of Google
- Google’s latest algorithm change could have big impact on your website
- SEO guide to Google Hummingbird
Strategic Partnerships have been crucial and pivotal to our recent growth. The challenge for a start-up is credibility and good quality partners bring you that compelling brand affinity. Initial conversations one day, can lead to a fantastic partnership sometime down the road. Don’t rush it, nurture it, show evidence of your quality, credibility, longevity and that you’re not going to fizzle out, within a month or two of signing that agreement, and sipping the bubbly.
Customer advocacy and the fantastic value available when happy customers talk about you to their network. This is key to scale and a primary cause for the explosive growth of Uber, Air et al. Putting the customer at the very heart of your marketing strategy is vital here.
Understand your customer
Companies that achieve scale have one key factor in common, they intimately understand their customer; they understand what their customers need, where they are and how they communicate. Tapping into this, evolving your offer, anticipating the next thing your customer needs on a bigger scale – that’s how you’ll step out of start-up and into scale-up.
Andrew Weaver is CEO of LawyerFair.