How to build a scalable business – 5 key takeaways from StartCon 2017
“The most dangerous moment comes with victory.”
This is the quote that Crunchbase CEO Jager McConnell finished his presentation with at this year’s Startcon. Though it belongs to a tiny French general from the 18th Century, it is just as relevant today in the tech world as it was then.
In 15 years as CEO of a successful development agency in Sydney, I have seen many startups build incredible products or services, gather great teams and then stumble at the last hurdle – just when the champagne should have been popping.
The reason? Scale.
One day you celebrate reaching critical mass. The next you’re overwhelmed by customers and a platform that can’t handle them.
This past weekend, the AlreadyBuilt team and I spoke to hundreds of members of our community at StartCon 2017. They too are faced with the challenge of how to scale smartly.
To help answer this question, we listened to talks from some of the smartest people in Silicon Valley and tech. Here are the 5 key takeaways I thought worth sharing.
1. Make technology your scalable weapon
Perhaps the most obvious point but also the hurdle where many startups fail. Rather than invest in technology upfront, most startups tend to use manual processes which quickly become unscalable.
So when do you switch from more manual processes to paid solutions? This can depend on your business and its progress. Around 32% of startups are less than 2 years old. However, it is the 2-4 year age range where these early decisions become critical for scalability and momentum.
Without overinvesting, buy the tech you need and make sure it can scale with you. It may be painful now but your future self will thank you!
2. Create a pitch that sells you
I pitched for AlreadyBuilt on Friday at Startcon, coming in second out of 111 competitors. The right pitch deck is important. After all, what use is having a perfect business model if you can’t convince others of its value?
To scale you will likely need investment, to gain investment you will have to pitch.
Jager McConnell went through some of the best and worst pitch decks he has seen in his time. His talk about how to create the perfect pitch deck was an expletive-filled delight for anyone who has agonised over their presentations before.
The message from him was simple. Talk to your audience, bowl them over, stay focused and lose the ego.
Some of his gems:
- WTFC – Who the F**k Cares – meaning: remember who you are pitching to. Make sure your pitch speaks to them.
- Choose your favourite baby – you can’t include every single detail about your business. Choose only the most relevant and powerful.
3. Testing is critical…but can be expensive
This was a recurring theme in many of the talks this weekend. Antonio Garcia-Martinez (author of Chaos Monkeys) and Jimmy Young from Lyft both highlighted the importance of testing.
Without careful testing, you can never be sure that what you are building is going to work.
Lyft follows a simple formula (predict a measurable outcome, justify the prediction and evaluate intuition with data). Each time you should be gaining insight that helps improve.
Garcia-Martinez also offered similar advice, sharing that Facebook generally launches 10 products expecting only one to be a success. (*caveat – you may need a few billion dollars for this). It was Garcia-Martinez who helped build the incredible Facebook ‘custom audience’ which has received credit for helping Trump win the presidential election. Thank you Antonio.
4. Design can make you stand out
Design can divide rooms. Companies like Amazon have never been too bothered about design because they are focused on delivering the best functionality and prices to customers. Apple, specifically in Steve Job’s era, would not release a product until it both functioned perfectly and looked beautiful. Who was right?
According to CEO of Dribbble, Zack Onisko – design is crucial!
“75% of users make judgements on a company based on design. Design is how you can set yourself apart from your competitors. True growth comes from designing something people love and providing a great user experience.”
Jimmy Young of Lyft agreed, stating that great startups succeed because they have better product intuition about their users than their competitors. After all, 10 years ago, who would have thought that we would happily get into the backseat of a stranger’s car?!
5. Face failure with a smile
Part of the process of scaling is failing. No-one personifies this better than Elon Musk who says:
“Failure is an option here. If you are not failing, you are not innovating enough”.
Moz CEO Sarah Bird’s candid talk was a quirky presentation about her 3 Highs, 3 Lows and 3 Don’t Knows from her Moz journey. She highlighted that sometimes you don’t always make the right bets, but as long as you learn from it and help get your team through tough times, the good stuff will follow.
If Elon Musk can watch hundreds of millions of dollars literally explode with each failed rocket launch and still joke (at least publicly!) then we need to be prepared to do the same as we scale our businesses.
So, when that moment of victory comes and the champagne corks are popping, make sure that you don’t wake up the next day with a hangover. Prepare your business for scale. This way your moment of victory will become the platform for progress rather than the start of a collapse!