5 Conditions for Surviving Start-up Growing Pains
Start-up companies. Many come and many go. Some revolutionise their industries while others sink without a trace. There’s sound thinking behind the old adage that there is no reward without risk and start-ups embody that entrepreneurial spirit.
That’s perhaps why there is so much fascination around them. And why so much is written about them, with one of the most common editorials being lists that outline why start-ups fail.
Chief among the reasons given is simply the problems associated with growing too fast. Breakneck growth is of course risky. But with the right conditions it can be done in relative security. In the case of Falcon Social, which has grown from four to almost 200 people in three years, recently secured series B funding and closed 2014 with a 443 percent revenue growth, I think five key conditions have helped us to ride out the worst of start-up growing pains:
• Timing. Any start-up, any company for that matter, must fulfil a current demand or solve an existing problem. This makes the window for success relatively narrow. There are many examples of brilliant ideas that came too soon. A classic one is SixDegrees, the very first social network. At the time of its launch in 1997, people were just not ready for the concept and so it fizzled. Fortunately for us in the social media software industry, we are in the right gig at just the right time. Being social media-centric is no longer just a fringe trait of millennials and internet geeks. Most individuals and companies of all ages are either already exploiting, or at least beginning to understand social media’s potential and its application.
• Location, location. Not every city is conducive to start-ups. Fewer still to social media and other digital technology specialists. To flourish a start-up needs a backdrop with the right kind of infrastructure and entrepreneurial culture willing to back them. In our case we are fortunate to be in our hometown of Copenhagen, recently named as Startuptravel’s top start-up city. Copenhagen’s highly developed start-up ‘ecosystem’ has an abundance of relevant events and resources that can help start-ups push through from ideation to reality. It is also relatively easy to secure work visas for foreign talent with the added bonus that English is the corporate language of most Copenhagen start-ups and larger companies.
• An international mindset. American start-ups have the luxury of being in one of the world’s largest markets with no obvious need to cross borders. But the flipside to that is the risk of winding up in a domestic dead-end. Being a child of a minnow market meant we had no choice but to adopt an international mind-set from day one, which has borne fruit in terms of sales and revenue.
• The right talent. The wrong talent is often cited as a symptom of too fast growth. There is no time for the proper screening so start-ups risk being crippled by ill-fitting employees. This is a real risk, as it is difficult to find the right people fast enough. This is where the ol’ HR department really comes into its own. A dedicated talent acquisition process is a must, and the talent net needs to be cast wide. It’s also where location comes once more into play: it’s no coincidence that the top start-up hubs such as New York, San Francisco, Copenhagen and London are already attractive places for the fresh and newly educated.
• And you gotta believe. It seems obvious. Clichéd even. But there is a clear line between those that believe in their product and those that don’t. To this end it’s also crucial that start-ups nurture their brand and their employees. Genuine pride and a real sense of team will go a long way in ensuring a start-up stays the course. It will also stem the notoriously high turnover associated with start-ups that focus on the numbers while taking the people that drive them for granted. Building brand and culture from day one is as vital as those sales numbers.