From startup to scale up: How the entrepreneurial mindset helped me scale a business
November 05, 2020
4 min read
The last time I wrote, was on the big step we took in our entrepreneurial journey: Selling our startup, and start walking along with a regional and much larger payment gateway. But, before that, we already had some time in the game with different businesses, some successful and others not much. The mentality and resilience generated in all these years of entrepreneurship struggle, has served the team and me to be able to flow in highly changing, dynamic, and challenging environments.
Everything has happened fast with a bit of an impact, but if there is something we have learned, it is that it is very different from creating a local startup than scaling a regional business. One does not happen without the help of the other: The entrepreneur’s path gives you the tools, and most importantly, the mentality to make a company grow quickly.
A startup is a small institution or company driven by a basic principle: Solving unsatisfied needs in society. And not by chance, because these natural needs are the ones that are precisely generated, because big institutions are not able to adapt fast enough to the changes we live on from day to day. Additionally, startups use new technologies, and their differentiating element is their ability to move fast. Which is the great objective of startups? Finding a market fit product, that is, a product that solves a market problem.
This is when the turning point comes. It is that moment when the market needs more of your product than your small company can provide, where the first big Black Swan has generated: An unpredictable event that is out of normal. What does all this mean? The startup takes off, and becomes what many call a scaleup or high-growth firm.
Surely, you are wondering what that concept is. A scaleup is an institution that has growth as its only objective. According to organizations such as the OECD or Endeavor, these types of companies are the ones that really generate impact in countries, and improve economies by providing numerous jobs. They are defined as those having at least 10 formal workers, who have experienced a cumulative growth rate of at least 72% for three years in a row (or a 20% average annual rate).
Scaleups use their product and their already validated business model, to grab the largest share in the market. But they have something of a startup too, since they seek to maintain agility to be able to adapt to a sharp growth as well as possible. They are what Google, Amazon, Tesla, and many more were some time ago. Ambitious in their essence, they want to break barriers and tend to monopolies. For that, they use financing, technology and human capital. Everything to maintain exponential growth.
It sounds like chaos and, to a certain extent, it is. But it is good chaos, of the kind that achieves genuine solutions to dynamic problems, which are becoming larger and bigger. It is the type of chaos that takes the best of some, inviting others to adapt or take a step to the side. And there are multiple variables in this stage: We work to systematize the processes that were made manually in the startup phase, in scaling sales to increase our reach, in strengthening our product to respond to new demand, in structuring the culture to attract the right talent, and in increasing the sense of belonging of new people joining the team.
It is a moment of change of priorities, where the question is moving from how we obtain more resources (money, advisors, talent), to how we can use those resources to generate greater impact.
Scaling without dying in the process
To grow this fast, the institution has to achieve adaptation in good way. In a dynamic and fast environment like this, that is achieved by delivering a sense of belonging to the people we work with. It is important to generate autonomy because, along with growth, roles are changing, and responsibilities increase.
There is a point where you welcome new partners every week, and things out of our control happen and happen. The clearest example is the Coronavirus pandemic. It is something that needs to be dealt with, and fast. There is disorder and there is chaos, but of the type that generates results, motivated individuals and, more importantly, those happy with their work. As in everything, there are good days and bad days, that is what makes it exciting.
Founders are no longer the only ones that create dynamics and make decisions. In that growth, there are several validated models to achieve market participation and continue developing a scalable product. But independent of the strategy, there are essential aspects that need to be addressed:
- First, the key point to be able to grow: Financing. Scaleups use external resources to leverage their exponential scaling. If the company decides not to have external financing, it slows its growth. There is nothing wrong about it, only that it would not be a Scaleup.
- Second, culture. As scaling happens quickly and challenges are increasing, it is important to maintain the soul of the startup you once were. If there is no clarity of that, it is easy that your values and objectives start blurring in the way, and that your decisions are inconsistent with that.
- Third, contracts, one of the biggest challenges. It is key to have resilient and dynamic people, that have the ability to adapt to changing environments. This is not for everyone, and that is fine; one must only know how to recognize it when expanding the teams.
- Fourth, chaos management. A little chaos is positive, it gives dynamism to the working environment, and helps to continue progressing. The important point, is to have it under control, and develop tools that allow each to do their work in the best way, even in chaotic moments.
And finally, there are many questions on which I do not have the answer. Nobody is born knowing how to scale a business. Questions are thousands, and they are pilling up in the way, but always with a clear objective: Achieving cohesion in the team to release its potential, thus achieving the greatest impact possible, helping our region to develop.
If you like traditional businesses, the structure and the known, working in a scaleup is not for you; but if challenges call you, changing environments encourage you, and you flow in change, I cannot less but recommend you working in a scaleup, that will fill your life with emotion and innovation.