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Updated: Oct 8, 2022
“We grow biologically and linearly. A year from now, you will be a year older — there's no growth hacking we can do to make that happen faster. However a company, as a collection of biological systems called humans, can grow exponentially.” – Khalid Halim
A person matures over many years, but a startup can grow exponentially. If you want your business to grow incredibly fast, then you want to install the right structures and to encourage compatible thinking.
How to Facilitate Exponential Growth
There can be many various catalysts and unique paths to any one startup’s exponential growth, but every successfully fast-growing company requires these seven elements:
In his book Exponential Organizations, Salim Ismail talks about a Massive Transformative Purpose*. He discusses how purpose is greater than strategy. Strategy can be confined by market forces or internal resources while purpose pushes people to extraordinary limits in the pursuit of meaningfulness.
Your purpose must be incredibly ambitious, clearly defined, and fully permeate every decision to inspire others to embrace, support, and evangelize your vision.
As a startup, you want to find platforms and partners which can grow with you for many years but not cost a lot right now. Ideally, you want commitments where if your circumstances change, you can quickly level up or down the resources and the subsequent costs.
When considering scalability, recognize your immediate and long-term needs. Today's crisis often represents an underlying problem that will worsen. So, balance a quick tactical response with the foundation to eventually solve repeating problems. Use today's pain as motivation to install an enduring fix.
Let’s consider an example of a design project due this week. At the same time, you realize that design projects are happening more frequently. You may find an immediate contractor for the current project and decide to build a team for the long-term if the work continues to increase. Since the work may cycle, consider a solution of knowing many reliable freelancers you can contact when needed. The costs are nominal when there is no need and the resources are there when needed.
Ultimately, your business thrives based on execution. Scalability encourages you to efficiently respond to wildly and quickly fluctuating demands.
Most of us understand the value of technology. Here’s my big concern, however – it can only solve problems when you understand the underlying cause. I’ve seen sophisticated and expensive systems which promise to automate work but create a whole new set of problems, including hiring other people to now manage the systems.
Sophisticated and expensive systems sometimes glam up a foundational issue without actually solving it. In medical terms, examine the organism, diagnose the disease, and then treat the symptoms. Don’t jump to technology as a treatment without the first parts.
Startups are considered by some to be the ultimate experiment in whether an organization can prosper or perish. Your business should constantly test new ways to increase revenues, reach new markets, and improve efficiency.
Many founders use metrics to compare their progress to the industry, but if I was your COO, I would emphasize using data to improve yourself over time. As soon as possible, establish a baseline to measure progress.
First, install a culture of learning through metrics. I constantly ask teams how they define and measure success. Second, struggle with the right source of data. Third, define the most useful questions to address. After all these steps you can start to collect, analyze, and report information.
For startups, stagnation is defeat. As an entrepreneur, you must constantly disrupt your strategy and execution. As a leader, you must constantly disrupt how you execute on your dream as markets, clients, tools, and the team constantly change to create a new dynamic.
Regularly question if you are capturing all the necessary data and if you are effectively applying insights to inform decisions. Right now, do you have the best systems, tools, and people for efficiently handling the business today? Finally, will that structure handle our expected growth, and if not, what is missing?
You want to install a mindset and processes to emphasize innovation that both resolves immediate crises and plans strategic campaigns. Determine the right cadence, task force, and tools to efficiently capture, implement, and evaluate new ideas.
You want to encourage people aligned with your values and capable of scaling themselves. With company growth, everyone’s role will develop concurrently. When hiring, look for people who are autonomous, motivated, smart, collaborative, and self-aware. These traits will encourage contributors who are self-improving and self-correcting to match a company’s pace as it keeps evolving.
Don’t look to fill only the open job today but emphasize people with the skills to handle a variety of opportunities and challenges, many of which you may never anticipate.
Once hired, utilize a clear onboarding plan to get them up to speed quickly. Support them with insights across other functions and the industry to allow them to make the best decisions. Encourage employees to treat their team as its own business.
Over time, if someone has been amazing but their role is exceeding their current potential, be direct about the need for a transfer, someone above them, or possibly a respectful and smooth termination.
Fractional leadership and outside resources can fill gaps, bolster knowledge, and level up teams quickly and effectively in a scalable way to match fluctuating needs. Find someone who is both curious and knowledgeable so they can ask the right questions and then recommend solutions based on your current and future challenges.
Rely on virality to build and expand your user community. Virality needs effective branding and marketing but thrives with the prompts and resources to encourage engagement. When satisfied stakeholders facilitate growing the company, you can see exponential growth. Measure their approval, apply their feedback to improve your offerings, and then encourage them to bring others into the communicate.
A great user experience encourages promotion, so start there. Then consider effective ways to refer new users (e.g. both the referrer and the referee get a discount, the person with the most referrals or social media posts gets free swag, or users and their contacts access to premium features for a limited time). Make sharing information, identification, and enrollment easy (e.g. “to get started, simply send them this personalized link”).
The Implications of Exponential Growth
Your startup will outpace most of its employees (including the current leaders) as it grows exponentially. This statement is not meant to be cruel, simply realistic. For instance, the head of customer service for 100 users has a vastly different job than the head of customer service for 100,000 users and may not be capable of handling both roles.
Even incredibly talented people may be incapably of pushing their skills, team, and ideas to the next level at fast-growing companies. Some founders bravely have this discussion from the outset, talking about how and when a person may need to level up or change their role.
If you see a change on the horizon, then talk with that person months in advance. Explain the company’s trajectory, predict your future needs, and offer some options for career development such as leveling up, changing roles, or working under a more experienced leader to grow under the right mentor.
As the startup evolves, it becomes a whole other company. That's obvious, but here's where it gets difficult for founders.
The same skills and approach that allowed you to reach this level of success could hold you back from reaching the next level of success. Revisiting the analogy of people, everyone knows you must treat a toddler very differently than you treat a teenager. Founders started with a baby which needs constant nourishment and being involved in every decision was essential. As the startup grows, that same constant management now limits your growth. If every decision goes through you, a bottleneck builds where decisions are made slower than necessary and new problems arise as a result.
In other words, the very traits which initially yielded success are now detrimental to future success. Founders who desire exponential growth and want to stay on the ride must be incredibly self-aware, adaptable, and open to change. You must be prepared to change yourself.
Delegation is incredibly hard. Even the best employees will not perfectly match your approach or reach the same decisions. I encourage founders to focus on goals, metrics, and guardrails. Let others know what is expected and what is not acceptable. The more you can set guidelines (instead of specific instructions), the more likely those expectations will be followed.
While it may be tough to let go, the way I think about delegation is an incredibly high tolerance for first-time mistakes (assuming they are not critical or malicious) and an extremely low tolerance for repeated mistakes. We are all fallible and our blunders can be a great source of learning. But repeated errors or unproductive behaviors mean that it’s time for change.
Setting high standards should help the founder to shift from owning the details to owning the results.
Well-intentioned, successful experts may be incredibly insightful around new offerings, business operations, and avoiding risks. At the same time, be wary of someone who has seen something work in other contexts and assumes the same formula can be applied in your situation.
“An expert is someone who tells you why you can't do something.” – Alec Issigonis
When working with experts, utilize their advice as a recommendation and not the definite solution. Make sure they are asking smart questions, learning over time, and reflecting your values. Then evaluate their advice by talking with other stakeholders, running your own experiments, and tracking metrics.
Expertise can be incredibly valuable but apply a healthy skepticism to prove it’s useful for your situation.
Exponential growth may strain or overload your current systems. In the worst-case scenario, imagine you vastly increase revenues, expand into new markets, and/or add a bunch of people to the team only to realize that your existing systems cannot handle the changes and cause you to lose time, money, and even clients.
While you likely cannot afford a robust system and team for excess capacity right now, have a plan with clear benchmarks when to acquire the necessary capital, tools, and talent if you expand quickly.
Constantly meet with potential investors, partners, leaders, contributors, and acquisition targets to have options in mind for the future. While your ultimate direction and pace are not predictable, optionality is definitely under your control.
These efforts prepare you for a variety of scenarios, build a foundation for exponential growth, and increase your options when changes happen fast and you're ready to launch.