At What Rate Should a Startup Grow?

The speed at which global business progress unfolds is staggering, and yet, when you take a look at the individual contribution to that growth, it feels as if it’s...

The speed at which global business progress unfolds is staggering, and yet, when you take a look at the individual contribution to that growth, it feels as if it’s happening at snail speed at best. To put it simply, it all lies in your own perception, but no matter how hard you try, you cannot hurry the evolution of a business entity, be it a little local bridal store, or a wannabe world-wide conglomerate.

So, when you look at you own young startup, and wonder how much time has to pass before you see actual results and visible progress, you may be unwilling to admit that the answer is as vague as the question itself: it heavily depends on a multitude of factors.

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Don’t be fooled by the initial soar

First of all, what makes a startup different from any business that has started operating is the blend of two key factors: the first is its large customer pool, and the second is its ability to reach them. When you make a product or offer a service many people need, and already have a way to reach them, you’re in the startup business – but that still doesn’t mean that what you see in the first few months is an indicator or a promise of future rocket-fast progress.

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In fact, many startups experience an initial calm before the storm, when they are just launching the business and waiting for the avalanche, which is when many starts fearing the worst, without realizing that this is a normal stage in the process of growth. Then, however, companies get carried away by a sudden boom in business, expecting it to go on forever – which it certainly will not. The fact that you are able to hit the magic 10% of growth per week in the first stages of development is no guarantee that you have sealed the deal of success down the road. If anything, it should only serve as an inspiration to keep an eye on your metrics while you make sure that your offer still remains appealing and reachable.

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The price of growth

Yes, every startup aims to be profitable as soon as humanly possible, especially in a market with high competition and massive investments at stake. However, although many companies see that the only reflection of growth is indicated in the profit earned, the truth for many startups can be quite different, and still no reason for alarm. The simple truth is that every startup is different and hence cannot measure its own success based on such expectations.

There have been numerous cases where companies were too eager to push their numbers up in the early stages of growth that they ended up losing all their funds when the time came to actually use them to make a profit. Then again, there are companies which are not left solely to their own financial devices, but which rely on equity funding for ensuring consistent growth and financial support in the long-term. With so many budgeting options and startup investments available, the possibilities to increase your growth rate are proportionally faster. The question remains if you can afford to focus on growth, and how much it takes for your particular product or service to start seeing a return on investment?

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Managing your expectations

The harsh reality is that no matter how excellent or authentic your product or service may be, every startup faces problems even before you hit the market. How you handle them will be another deciding factor in the speed of your growth. Do you have the right team on hand to empower the desired and potential growth of your startup? Depending on your niche, business strategy, and funding, how fast can you start seeing your sales making up for the costs of providing your product or service?

Many startups are dazzled by the idea of overnight success reported by the media, but those are exceptions to the rule that time is the one commodity you cannot afford to waste, especially on wishful thinking. If you have done your homework and you’re able to create a forecast of your revenue, you can adapt your strategies to achieve those results, and scale at the speed your startup can not just survive, but at which it can bloom. Sometimes, therefore, sacrificing speed for long-term success is worth doing even though you might not enjoy the immediate glory.

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No cookie-cutter metric

When you take into consideration the fluctuations of the global market and the rate at which we now see innovation changing our world, the fate of startups everywhere cannot be a templated route of numbers and equations. A tech startup in this day and age has all the more potential to succeed due to the needs of the market, but even then, fierce competition paired with faulty or rushed design can lead to failure, making room for a more patient player to step in and reap the profits.

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Therefore, focusing on the right elements of growth will make all the difference in finding the right tempo for your startup, without risking to eat the dust of other companies, or get lost in a whirlwind of uncoordinated efforts.

Categories
Startup
One Comment
  • Ardhendu
    16 March 2018 at 8:23 pm
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    Thanks so much for this tutorial.

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