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Are You Ready For Hyper Change?
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In this post-funding avatar, beyond the realm of the core that must be preserved - lies a whole new world of challenges and excitement that the startup must gear-up for. The scale and complexity of this new reality can be characterized across three domains:
Hyper-growth (market driven):
With a proven business model, marketing strategy and a sales engine behind them, the startup need to accelerate the scale of their market penetration. This requires them to focus on building sales and marketing teams, leveraging technology for building their sales funnels, PR and branding. Assuming that the rate of customer acquisition continues at an exponential rate, the startup now needs strong mechanisms to track their performance in the marketplace (in absolute terms, and in relation to their competitors). It is quite likely that the startup will contemplate newer market segments and newer product variations to fuel their growth.
While this market-facing developments are taking place, the startup must ensure that the scale of change does not reduce their customer-connectedness. One of the key abilities that brought the startup to this stage is their intimate knowledge of, and relationships with, customers –at no cost should this be compromised.
Hyper-growth (organizational focus):
Growth in market is driven by, and in turn drives, growth in organizational size and capabilities. In many ways, the organization is the fuel that keep the startup going in the eyes of the customers. While the early version of the startup was limited mostly to the founding team members, there is need to bring in fresh perspectives and talent now. In this stage, startups quickly feel the pressure to define flexible-yet-effective organizational structure, develop means to attract, orient and retain talent, and to develop leaders at various levels.
Management of change, development of organizational culture, designing and redesigning of jobs, and various organizational development strategies are required to be undertaken by founders – with renewed energy and focus. Personally, the founders must now learn to “let go”; and empower others in the organization to take on more and more responsibilities. As much as the focus is internal --the founders will also need to take care of the external environment as it relates to cultural, social, legal, and governmental rules and regulations.
From being accountable largely to themselves [assuming that this is the first instance of external funding for the startup], the founders will have to accept the new reality of new stakeholders in their venture. Shareholding percentages notwithstanding, this means a greater two-way exchanges at the Board level plus greater operational accountability to produce the results that have been promised to the investors.
The new pressure on performance is as qualitative as it is quantitative – the startup has to produce effective results in terms of number of customers, customer loyalty, financials and building a strong organisation.
Read Also: So Your Start-up Got Funded, Now What?
Read Also: Preserving Your Core
The author, Ajay Batra, is CEO, Lutyens Startups