Published on December 2nd, 2021 | by Bibhuranjan0
How to Grow Your Tech Startup Without Going too Fast
Every day, new startups get founded. Some become major players in our everyday world – companies like Uber and Airbnb have grown tremendously in just a few years – but not all of them have such a rise to fame. The truth is many startups struggle to make the transition to scaleup. They often want to grow too fast and don’t have the funds for it, or struggle with retaining their employees. Many start-ups even go bankrupt in this phase, unfortunately. In this article we’ll talk about the pitfalls of growing a start-up and what you can do about it to make sure your tech startup survives and thrives.
Some startups fail because there’s no market
There are many reasons why startups fail, but there are a few scenarios that happen more often than others. One of those reasons is that sometimes, there’s just no market for the product/service. Sometimes the timing is wrong, and sometimes the timing just isn’t right for the masses. This is often the case for tech startups, so watch out for that! If you have an incredible idea, it might be handy to put time and effort into market research. If you only tell your idea to your closest tech buddies, they might be really pumped and tell you to do it. But if no one around you gets what you want to do, you might need to re-evaluate your plans before sinking all your hard earned savings into your startup.
Money is so so so important
Many entrepreneurs misjudge just how much money they need to market a product or service. If you spend more than you bring in revenue, you’ll get in trouble. Your CAC or Cost of Acquiring a Customer should always be less than the LTV or Lifetime Value of a Customer.
For many startups, money is an issue. While you’re trying to get your name out there, you’re pumping so much money into advertising that you might not have enough money to continue working. Mismanagement of money is also often an issue if the people in management don’t have any experience in managing a company. For that, we recommend that every startup, no matter how small, has an accountant that can ring an alarm when things go wrong. They can also tell you to hire a collection agency (Dutch: incassobureau inschakelen) when debtors aren’t paying their bills. You might get into trouble with the liquidity of your company if debtors don’t pay up, so it’s important that all your bills are paid. A debt collector (Dutch: incassobureau) can “hunt” your debtors down and make them pay.
Hire a good management team
Many startups have people in management that have worked there for a long time. The marketing director was once the marketing intern. And the COO might be one of your best friends. While this isn’t necessarily a bad thing, it can be if your startup becomes too big. While people can grow in jobs and grow alongside the company, management can also often stop the growth of a company, especially if they don’t know what they’re doing once the company gets too big.
That’s why it’s never a failure to bring in more experienced people. Especially as a CEO it’s often a great idea for your company to step down and have an experienced CEO take over, while you consult. If you love your company and your idea, you wouldn’t want to thwart its growth, right?
Good luck with your tech startup!