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4 ways to sidestep the pitfalls of scaling your startup

By Dr. Amy Osmond Cook, KSL.com Contributor | Posted - Aug 13th, 2018 @ 1:00pm



SALT LAKE CITY — As Utah's tech scene continues to witness explosive growth, many startups are currently winding their way through bumpy roads, growing pains and even pitfalls in order to successfully scale their brand.

While not all pain points can be avoided while building a company, there are ways to identify and solve some of the obstacles on the path. Here are four ways to sidestep the pitfalls of scaling your startup.

1. Overburdening C-suite employees

You have an incredible top-executive team filled with mega-talented geniuses, but an overconfidence in your team can lead to disastrous results. Assuming your CFO can manage their accounting responsibilities as well as customer service, lead generation and human resources is unrealistic.

Solution:

Consider outsourcing some of those vital departments. Consensus, a software-as-a-service company headquartered in American Fork, was ready to grow but knew they wanted to build an even stronger sales development team.

Hiring a good team quickly isn’t always optimal, so Consensus founder Garin Hess looked to Lehi-based Boomsourcing as an outsourcing option for their sales development.

“Growing companies simply don’t have the resources to manage a call center, yet rely on the solid sales leads call centers net,” said Rick Cid, vice president of Boomsourcing.

With Boomsourcing's communication technology and team of live agents, Consensus was able to integrate the lead-generation strength they needed to grow.

“Boomsourcing has saved us a ton of money in overhead and training costs,” Rex Galbraith, vice president of sales for Consensus, told the Lehi company during a case study. “We get almost the same results from Boomsourcing as we would with an internal rep, but at half the cost.”

2. Failing to scale customer service

Strong sales numbers are the first goal of scaling a company, but eager CEOs often direct all their resources into lead generation, overlooking one vital department — customer service. Just as your client base grows, so too will the need for quality customer support.

Seventy-three percent of people recently surveyed say customer service is an important factor in their purchasing decisions, and 54 percent of U.S. consumers say customer experience at most companies needs improvement, according to a report by PricewaterhouseCoopers, one of the largest professional service firms in the world.

Solution:

Get creative when building out a customer service team. While outsourcing customer service departments to companies like Boomsourcing is a viable option, one Silicon Slopes startup decided to go a slightly different route.

Chatbooks, a company that transforms digital photos into picture books, has successfully enlisted stay-at-home moms for their customer support team, a plan that not only fills a need for a different segment of the workforce but scales well, according to co-founder Nate Quigley.

In Chatbooks' early days, the company didn’t have office space to house a team of people. Employing stay-at-home mothers allowed the company to quickly create a customer service team without physically expanding its workspace and offered busy moms flexible work opportunities.

Dubbed the "momforce," these women are also active Chatbooks customers, so they can effectively relate to other customer concerns, Quigley said.

“We choose people who want to be involved but need flexibility,” Quigley said. “We often hear, ‘Hey, I love this company. I’m a customer and I want to be involved, but I don’t want to go to an office.’ That attitude and our model completely changes the customer service experience.”

3. Hiring the wrong people

Hiring a new employee can be costly. When startups reach the exciting point of officially expanding their team, they often jump into the hiring pool too quickly.

Overestimating hiring needs often backfires, resulting in poorly-vetted candidates, weak employees and high turnover.

Solution:

Consider contacting executive placement agencies who specialize in vetting job candidates and pairing them with their ideal job.

The NaviTrust Group, which recently launched the targeted recruiting platform identifyd.com, invests time with a company up front to pinpoint what they are looking for in an ideal job candidate.

"Through screening processes, we introduce the people to companies who would already pass their initial first and even second screening steps,” said Taylor Cotterell, executive vice president of NaviTrust. “Instead of raw candidates, they are getting more selective applicants. It’s simply more efficient for the company. The interview process is shorter. They are getting the finished product, more of what they’re looking for.”

Placement agencies are also active headhunters and will seek out employees who are already working and not going to respond to a job posting. Do some research on the placement agency you contract with, however, as not all recruiters actively headhunt.

4. Lavish spending

This might seem like a no-brainer, but quickly-growing companies are often eager to jump into grandiose office spaces, extravagant company retreats, over-indulgent employee perks and more.

“The problem is that many of these tools don’t scale and will only solve short-term problems — making a company bloated with costly and ineffective solutions," Patric Palm, CEO at organizational app company Favro, said in a recent TechCo report. "While it’s important to grow fast, it’s just as important to build a culture of frugal spending habits."

Solution:

Startups should consider the example of a young newlywed couple trying to manage their family budget. Adopt the mantra of living within your means and follow the wise rule of thumb — if you can’t pay for something in cash, you don’t need it.

Chatbooks, which currently has a large office space in the old Qualtrics building in Provo, began by subleasing a corner of a shared workspace. The company continued to expand in the same building until 70 people were working in a 6,000-square-foot office.

“We really do believe in the ‘earn it’ method of growth,” Quigley said. “Try not to buy things on a credit card. And that fancy office? When you can pay for it in cash, that’s when you do it.”

Silicon Slopes is brimming with up-and-coming startups, but without well-planned scaling tactics, success is only a fleeting dream.

Editor’s Note: The author of this article is on the board of Osmond Marketing — an agency that has worked with the NaviTrust Group. Osmond Marketing was not paid or contracted by NaviTrust to write this article.


Amy Osmond Cook, Ph.D., is a board member of the Association of Skilled Nursing Providers and Osmond Marketing. She is a regular contributor to Entrepreneur, Forbes, Huffington Post and other publications.

Dr. Amy Osmond Cook

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