Many entrepreneurs have been zoning in the startup landscape, but only in a literal sense. While they might have moved past that territory, it’s difficult even for the founder to assess if to be called a company or not yet.
According to the GEM global report, more than 100 million businesses launch annually. As we know it, more than 90% of those fail. And of those that stay, let’s accept that not all of them can be startups perpetually. The longer their lifespan, the higher their chance of survival in the market. So if I were to gratifyingly summarize this into a stanza, this is what it’d say-
Startup startup everywhere, most of them do sink,
Startup startup everywhere, but few do make it to the ring..
The following list might be helpful to assess how far you’ve traveled through the startup land and when is the time to dust its shavings off .
The reason? Because you need to come out of the startup zone; which at times becomes a comfort zone if you’ve done it for a long time. Because you can’t continue to solve the same set of problems if you desire to march your way into the growth factory. And because you need to emerge as a company with a credible brand in the market.
So here we go-
1. You’re thinking profit as opposed to product market fit– you are no more in survival mode. You’ve attested Charles’ theory of being fit enough to join the race. You keep a close eye on your profit numbers and not just your revenue. Running your growth engine at full speed is your utmost priority so you are even willing to feed in all the profit back onto the belt.
2. You’re on a constant mission to improve operations– Researching the right tools is your new-found interest. You’d go to any damn roundtable session just to see what tools other players, who are peeping from the heights, have used to scale. You’re on a constant mission to automate all those recurring tasks that take a lot of your team’s effort and time.
3. Hiring becomes a continuous process– There were times when a need to add another person to the team was felt just because there was too much on the table for yourself. Then you were hiring to complement skills. But now you hire because you need to maintain a constant pool of good candidates who could help your growing team in any which way.
But obvious, you have started following processes that come with it (read performance reviews, leave policies, office timings), which you might occasionally dislike.
4. You have separated out functions- There were times when you and your initial team wore multiple hats; you were the Devops guy as well as the office boy. But now you have separate departments with dedicated members. Marketing and sales are now different functions, practically enough to sell directly and indirectly.
This helps your team members keep focused and of late you’ve validated the productivity and efficiency in overall outputs.
5. You prepare budgets and roadmaps- You swear by quant-based marketing/sales/ops. You plan all your activities (by far) and track everything against the metrics positioned. The “n”x growth target tags along wherever you go and you have all the forecasting in place.
Guess what, now you also prepare budgets for marketing, sales and HR on the additional things to invest in, apart from the fixed costs.
6. You no longer know the names of your clients- Who doesn’t remember their initial customers? Some of us can say their names even in our sleeps. But as you start growing out of the startup phase, it gets practically impossible to remember their names.
As you grow further, you’ll find them only in numbers and targets, completely oblivious to their names. That’s when things start to get emotional, when the past presents itself in a colorful backdrop. But you hold on to the courage and sheepishly feel happy for the fact too.
7. You spend most of your time “on” your business- Mitchell Harper had written a great article on Pulse called Good CEO’s aren’t busy. He quotes Jack Dorsey on how good CEO’s are editors and not writers.
Once you’ve moved past the fluxes, most of your time goes in strategizing and overseeing operations vs doing things yourself. You’ve got most of the things covered and no task is solely dependent on you. Things are taken care of while you’re away for a vacation and you then know your startup has become quite independent of you.
How many of the above could you check off? At PromptCloud, we’ve successfully checked off all. I’ve seen people measure startup stages in terms of their annual recurring revenues (ARR) or/and the number of rounds of funding they’ve managed. This theory is frustrating as it’s inherently flawed. You might be making billions in ARR on paper and would have put up a team of 1000, but who knows how much of the world’s cash you’ve burnt already and what your losses are?
A friend from the startup fraternity once said that as long as the problems you have while on your entrepreneurial journey keep changing, you are on the right track. So if your problems have changed enough, time to be called a company. Alright, you can still call yourself “a startup at heart” okay?
[Guest article by Arpan Jha from Promptcloud team.]
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