5 Telltale Signs Your Startup Is Growing Too Quickly
Growing a company quickly has long been considered a hallmark of startup success. Founders demand it. Investors fund it. And the industry celebrates it. Yes, Fail hard. Fail Fast. Fail Forward. is synonymous with every aspect of industry success and the mythology of tech giants like Amazon, Genentech, Apple, Facebook (now Meta), TikTok, WeWork, and the proverbial like.
But for all the affinity towards namesake companies that outgrew their dorm room origins to obtain superstar startup status, there is an onslaught of lesser-known companies that grew too quickly, and often failed altogether. According to The Kauffman Foundation and Inc. Magazine, only one-third of Inc.’s annual 5,000 Fastest Growing Companies were in business after three years, with the majority downsizing or going out of business entirely.
So, what are the hallmark signs of growing a company too quickly? And what should you do as if you’re leading the charge at an organization that is superseding its size? Read on to discover these five salient points and how to reposition yourself for the long game.
- Lack of brand clarity
The path of building a company — especially when scaling and pivoting — should be crystal clear to all involved. When there’s a lack of straightforward branding basics — mission, vision, values, and overall objectives — employees don’t understand the organizational goal or the expectations around how to build it.
Brand clarity is especially important for all senior leaders to succeed in any organization. If your executives and middle managers don’t understand the goals of an organization, it’s a big red flag that your growth could be disrupting the organization’s end objective.
2. Not set up to scale
The startup adage, Fail Hard. Fail Fast. Fail Forward., only works when you have suitable systems and resources to fail and continue to grow. Yes, at an essential level, you must have suitable hires (see below) and the right amount of funding (and runway!). But it also means the actual operational systems of how each team functions are in place, starting with the most basic and essential items — do your employees have the right tools they need (such as equipment, desks, software) to do the job? Does your organization have partnerships with the right vendors, suppliers, and manufacturers to scale production? Do you have the right kinds of administrations in place (such as lawyers, accountants, and managers) to facilitate deal flows?
3. Hiring decisions fall flat, and HR complaints increase
One telltale sign your company is growing too quickly is when the demand for new hires means you’re hiring the person available to fill the role, and not necessarily the right or most qualified person for the position. Often, a combination of unqualified hires who lack experience, an organizational lack of brand and logistical clarity, and a lack of access to resources, can lead to decreased clarity and morale, increased infighting over resources, and a surge in HR complaints, quitting, and overall discontent.
4. Innovation falters
Part of the excitement of startups is the amount of innovation and creativity that pours into — and out of — each of them. From the development of the product itself to the way business systems are cultivated to support brand growth to the marketing campaigns that turn napkin ideas into iconic cultural names, creativity should flourish in the startup space. A lack of innovation in a business, though typical for incremental periods, should never be a long-term trend. Ensuring that new ideas are being cultivated — and given the right amount of resources to flourish — is essential for any company to keep their brand competitive in their respective market spaces.
5. Product quality is going down
Are you cutting corners to meet demands? Are you able to fulfill promises to customers? Are you receiving more customer complaints than usual? The latter is a telltale sign that you might be scaling your company too quickly. As the CEO of KIND Bar learned, fast growth can reveal flaws in every aspect of your business, including the very elements of the product your customers initially fell in love with. More so, it could end up costing you customers in the long run.
Streaming business revenue to scale your company is an essential way to prepare your company for fast growth. Specifically, focusing on perfecting the operational management of your startup can save your employees time — and your business money — ensuring the sustainable development of your company in the years to come.
So, how do you do that? Lucky for you, digitalundivided offers digitalundivided: sessions — a free founder educational series for our community, bringing in leading thought leaders from the field to engage directly with you about entrepreneurship-related topics, such as launch strategy, marketing, operational strategy, and other essential elements of building a vital, scalable business. This October 26th, you can join Kalish Nesbitt — Client Success Manager at IFundWomen and founder of Well-Run Retail, to learn the six core areas of operations management to scale your business while saving time and money.
Sign up for this free, digitalundivided sponsored and virtual event here!
