August 16, 2016
Most startups would love higher growth: A faster scale means a higher valuation and greater recognition in a field. But actually getting that growth in a safe and sustainable way is tough. As Startup Genome once found from studying 3,200 startups, 70 percent of failed startups failed due to premature scaling.
In a recent post, Patrick Meenan, of Arthur Ventures, has revealed a list of details that are similar across Arthur’s portfolio of high-growth companies. The portfolio is entirely B2B companies, so these takeaways may be biased, but many of them are universal. Here’s a quick rundown:
1. Product-Focused Founder or CEO
Product-first leaders attract the best employees, can better predict the market, and have the foresight to stay big picture and look at the long-term.
2. Turn Customers into a Commodity
Specifically, this is done by “creating a system by which customers directly benefit from interaction with each other to the point of near dependence on one-another,” but this can manifest in plenty of different ways, from user-led job boards to user meetups.
3. Triple Down on What Works
“If they were an inbound model, they didn’t go heavy on outbound. If they were high price point, they didn’t introduce freemium. You get the idea.”
4. Invest in Early Recruiting
Many others agree on this one: Early-stage recruiting is essential, and will make the difference between the next Uber and the next total flop. Hire your first in-house recruiter before you pass 20 employees, and you’ll be happier for it.
5. Committed Board Members
Members of your board should be emotionally intelligent and willing to show up and discuss business. That’s how you get the healthy, supportive environment that a board should be providing.
6. Low Burn
Keeping a relatively low burn is the key at high-growth companies. Just keep a hold on the same “scrappy” mentality that kept your business going when it was small.
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