The Bold Place

Are you a start-up or a scale-up?

22 Jan 2025

Maybe you're an entrepreneur and you haven't realized that your start-up has started to scale-up. Or maybe you are sensing it but you are not sure if it is really happening. Maybe you are a CEO and you have seen the need for your start-up to make a quantum leap and start to organize itself as a scale-up. Or maybe you're an early employee of a start-up and you're pissed off because your company is changing too fast. Or maybe you are a business angel and you think that one of your main start-ups is already starting to be a scale-up, but you want it to accelerate its growth even more and thus multiply the value of your investment. This post is for you. 

When a start-up begins to transition into a scale-up, it is one of the most important and vital moments it will encounter on its way to becoming a successful, profitable and sustainable future large company. A scale-up is a company that has moved beyond the initial start-up stage and is experiencing rapid and sustained growth, both in terms of revenue and in terms of customers or employees. This term is used to describe companies that have demonstrated viability in their business model and are in the process of scaling their operations to expand their market impact. Realizing that your start-up, whether you are an entrepreneur, employee or investor, is beginning this transition will be key to the success of the company as well as your own personal success. 

What are the key elements that will make you see that you are at the start-up / scale-up transition point? 1) Your company has a proven, viable business model with a clear path to profitability. 2) You have achieved steady, accelerated growth typically between 200%-300% per year in revenue over a 3-year rolling period, usually accompanied by sustained employee growth, geographic expansion and ongoing new product launches.usually accompanied by sustained employee growth, geographic expansion and continuous new product launches. 3) The startup has closed or is in the process of closing Series B or C rounds of investment. 4) You have a consolidated core team that only needs to add new recruits to an already stable structure.

Well, you already know that your company is a scale-up and you are working non-stop to reach your goals. What challenges will you face? 1) Maintain the quality of the initial product that led you to your first success, while scaling the company non-stop. We all imagine examples, is making 100,000 smash burgers a year the same challenge as making 10M burgers? Clearly not, there is a challenge of maintaining quality. 2) Start competing with companies bigger than you and challenge them for leadership. Scale-ups always have competitors whether they are new or traditional, with them you will compete for customers, talent and investment. 3) Create, manage and administer the growth of the team and its impact on the company's values. The successful team of a start-up is not the same as that of a scale-up. When companies grow, they need more specialists in each of the areas. And they need to organize themselves in methodologies that can sustain continuous growth for months. Planning and execution will be key, and the challenges are enormous. 

Finally, what are some of the scale-up best practices that come to mind (and that Aticco has some of the best in Europe)? 1) Standardize processes, i.e. methodology, methodology, methodology. 2) Recruit and retain talent. 3) Maintain quality, continue to focus on the customer. 4) Enhance organizational culture. 5) Scale technology. 6) Financing management. 7) Anticipate major risks, to the extent possible. 

 

Having said all this, are you a start-up or a scale-up?