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Evolution of problems from startup to medium size

by Weave Asia

Pitfalls Startups Should Avoid When Evolving Into a Medium-sized Business

It can be an exciting phase of growth when your startup evolves into a medium-sized business; however, it comes with its own set of challenges that can dampen the transition if not addressed timely. Lucky for you, many founders have gone before you, and in this article, we summarise some of the potential challenges so you can better equip yourself to avoid them.


Not Hiring The Right Leadership Team

Startups start with lean teams, but as they grow and more layers of people are added, pressure increases on leadership to take on managerial roles – something they’re ill-equipped to do. Another common problem faced when startups experience rapid growth, is founders being prone to prematurely hiring the wrong people to meet immediate demand for tasks to be completed.

Eventually, your core leadership team will be expected to develop a vision for the business on top of having an influential network to leverage for additional funding, so choose wisely. Leadership should not be confused with managers, so ensure you hire enough people managers for the day-to-day as well.


Unable To Face Increased Competition

As a startup, your offering might be somewhat disruptive, gaining the attention of early adopters that buy your product. When you start scaling, you’ll have to appeal to the majority, a very different set of buyers. This is where startups think
they have proven product-market fit with the early adopters but fail to compete with more prominent brands that own the mindshare of the majority as they grow. At this stage, companies either get stuck or completely lose out.

Find your competitive advantage, be that quality, price, customer service or convenience and continuously test for product-market fit at every growth stage of the business.

Pro tip: don’t be tempted to personalise your offering for a small subset of your customers, either.


Having Little To No Marketing Investment

Marketing often gets neglected to what are deemed essential parts of the business such as product, human resources and customer support. Marketing is either non-existent or used ad-hoc to gain traction when a startup is bootstrapping. As your company grows, a lack of long-term investment in marketing will mean the brand will suffer, and a heavy reliance on a few channels mean if they fizz out, you have no alternatives.

You want marketing to be a source of sustainable growth for your mid-sized business, so don’t depend on the channels that helped you scale, instead diversify your marketing strategy early and invest in experimentation.


Maintaining Culture And Employee Morale

Startup are small and close-knit, however, as your business grows, communication breaks down, and access to leadership becomes limited. When individuals begin to question how they fit into or impact the business, employees become disengaged, retention is problematic, and attracting qualified talent becomes challenging.

Remember to put your staff first and ensure they aligned with the company’s mission and goals. Give them access to leadership where possible and invest in a people operations teams as soon as you can to keep morale high, and ensure that new hires are a good culture fit. Happy teams also look after your customers better, so it’s a win-win.

We’ve only touched the surface of challenges you may face as a startup transitioning into a medium- sized business. But if there was a key takeaway, it’d be to set long-term goals that are scalable yet agile. Remember that you’re not the only one facing the growth spurts of becoming a medium-sized business and that there are the tips in this article and more out there available for you to adopt.

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