For entrepreneurs, creating your very first startup is one of the most exciting times in your life. It’s a time full of opportunities, expectations and hope. Some might call it naivety, but founders should enjoy that initial spark - after all, that’s what makes us become founders in the first place!
Apart from being an amazing reference to an incredible film series (Paul Walker, we miss you), the fast and furious approach is helpful for all startups to consider. This method refers to founders who stop at nothing to deliver their goals. Nothing can stand in their way as they strive to create their million-pound company. Sounds great, right?
How do startups grow so fast?
As much as we’d love them to, most startups don’t achieve major success overnight. Wordle might seem like it’s achieved rapid growth, but its founder, Josh Wardle, started working on the prototype all the way back in 2013. In a similar sense, nothing in the startup world happens on its own. So, put simply, startups grow too fast because their founders make them. Founders do this by scaling up prematurely, and they do this for a number of reasons, including:
● A startup has had success with a couple of clients and founders believe they can then sell to many more.
● Founders get overexcited.
● Founders become impatient for results.
What happens when companies grow too fast?
We’ve heard the benefits of growing a startup really quickly, so we know what’s next. Scaling up a business before its time has a lot of dangers, not least the risk of going bust and losing everything you’ve been working so hard on for so long. Believe it or not, growing too fast can be just as damaging to your startup as not growing at all.
The major issue when scaling up a business is being able to manage its financial health effectively. Steady growth enables founders to learn how to manage cash flow and even make mistakes along the way. Alternatively, a founder who has seen considerable growth in their startup in a short space of time cannot afford to make a blunder with business money. What might otherwise be a small mistake could cost thousands for rapid-growth startups.
Another mistake founders make when scaling up too early is hiring the wrong people at the wrong time. Most businesses dedicate a significant amount of time to the hiring process, consisting of interviews - sometimes multi-stage - and written assignments. However, startups that are experiencing exponential growth simply do not have the time for this process. Instead, they look to hire quickly, not considering a person’s skills, expertise, or even getting to know their new team member. Moreover, new employees can find being plunged into the abyss overwhelming and therefore not stay very long.
Every business knows that customer service is the most important part of a service or product. At the end of the day, if your customers aren’t on board, you won’t make any sales. When a startup is growing too fast, employees are often stretched far and wide to meet customer demand and end up neglecting customer needs. A few complaints are usual for most businesses, but when you have hundreds of angry consumers on your hands, things can easily spiral out of control.
Building a business is a balancing act of many different things. It’s important that founders don’t put off scaling up simply because they fear potential damage to their company. However, it is wise for startups to make a comprehensive plan before entering the next phase of their business. The fast and furious approach might be exciting, but it can also be fraught with danger.
