Two Practices Your Startup Needs Before You Reach Explosive Growth

You’ve spent the last year scrambling to get product/market fit before you run out of money.

Now, without realising it, you suddenly have a 15-person startup and not a single company policy.

But you don’t want your startup to be like a corporate, right? Bureaucracy impedes progress.

Right and wrong.

Yes, too much red tape will always get in the way of innovation.

However there are a few crucial elements of process that, if you implement early in the life of your startup, will alleviate some of the worst growing pains and ensure your startup is ready for explosive growth.

New Employee Training

Until now, everyone joining your company has likely been the first or second person in that role, and there’s been little to learn before they hit the ground running.

As you grow, this will become harder.

People will naturally become busier as growth starts taking off, and your new joiners can end up sitting at their desk for days without anyone fully explaining how your company works, and what they should be doing first.

The way to counteract this is to develop a form of new joiners training. This will help the employee quickly understand everything they need to know about your company and their role, and ensure that person isn’t held back from doing their best work by incomplete information.

Each company is different, so your training can have different forms, but my suggestions for helpful practices include:

• General Welcome Pack: This will include information on what the company does, who its customers are, as well as details of every employee in the company including name, photo and role. This is where employees find out how to set up their email and which Slack channels to join.
• Role- specific Welcome Pack: Each different area of the company will have different practices that need to be shared before a new joiner can function effectively in their role. In engineering, this could mean information about how the team is set-up, which project management tools they use and details around the codebase. In Sales, that could mean the specific sales process you use, as well as demo scripts, most common objections, and data to help close customers most effectively.
• Internal Wiki: This is where new and existing employees can go to find the answers to questions like: “What’s our expenses policy?” or “Who do I speak to if I need a software subscription?”. By providing answers to these frequently asked questions you can save huge amounts of wasted time.
• Show & Tell: This is an excellent way to introduce new joiners to your company in a personal way. On Friday afternoon, get your new joiner to do a short presentation to everyone about their journey to your company. This can include where they’re from, their education, their travels, their previous work and the hobbies they enjoy. Revealing information about yourself is a great way to build relationships quickly and encourage people to feel they know you as a person rather than just as a colleague.

Over time, as you grow, you will also need to implement ongoing training for your existing employees, both to maximise their output and to increase loyalty by demonstrating you’re invested in them personally, and want to help them achieve their potential.

Metrics

“You can’t manage what you can’t measure” Peter Drucker.

In the first few months of a startup, you’re just trying to prove that someone has the problem you’re trying to solve, and that they want to buy what you’re selling.

Once you’ve proven this, the next objective is to grow as quickly and profitably as possible (growth vs profitability is an article for another day).

When your goal changes from ‘getting users’ to ‘getting as many users who pay you money as possible’, it is imperative that you start measuring everything.

Dave McClure’s Startup Pirate Metrics are a good overview of what you need to measure overall: Acquisition, Activation, Retention, Revenue, Referral.

You can drill down into each of those 5 points and find a number of metrics that when analysed regularly will help you understand where you’re achieving success, and where you can improve.

I will dive deeper into metrics in future posts, but to name a few now…

For Marketing:

How many website visitors do you have per month?

Where are they coming from?

What percentage of visitors convert to leads?

How is this number changing over time?

For Sales:

How long is your sales cycle?

What percentage of sales-qualified leads convert to customers?

Which segment of your target vertical has the highest percentage close rate?

For Customer Success:

What percentage of your users become active users/convert to paid?

What is your monthly churn rate (number of customers and dollar value)?

What is your customer NPS?

For Finance:

What is your customer lifetime value?

What is your monthly recurring revenue?

What is your average contract length?

With limited time and money, knowing the answer to these questions can quickly mean the difference between success and failure at your startup.

Only by measuring everything, can you truly live the ‘Lean Startup’ methodology — test, measure, iterate, improve…