There is no one-size-fits-all model for those in the entrepreneurial realm or tech space, but it comes down to how you decide on your size, whether you understand scalability and how you manage and measure your business model. According to a study done by Open View Partners, "the average startup receives $1.5m in funding and gets itself in trouble by trying to scale too quickly. The average startup has just over five employees. Ultimately, the average startup fails before it reaches maturity." These numbers aren’t meant to scare you out off from pursuing your business dreams, but rather serve as a useful tool in assessing the size of your company, and why it matters.
Scalability vs size
“Every entrepreneur must make the choice to grow their business, or stay small. It is typically implicit that to grow revenue you must hire more. That choice is false dichotomy.” Gavin Zuchlinkski, Fast Company
One of the biggest challenges in running your startup, is getting the scalability right. There’s nothing worse than being overvalued and not able to deliver consistent growth for the month and years to come.
Your personal business model and vision of your tech company will determine the type people that you employ. In order to get the most out of the size of your company; you have to think ‘quality’ rather than quantity’.
Types of measurement
As a company, you should establish your worth according to your own system. Of course, netprofit is a clear indication of whether your business is successful, but there are other measurement to determine your success as well.
A great determining factor in a company’s success, is the amount of influence it has. How are you disrupting your industry as a brand? Do you have credibility, contacts and reach? Establish yourself as an industry leader.
Your tech company could consist of 30+ employees that are half as productive as 510 highly ambitious employees. Choosing the right people will show you that size is just a number.
Hiring employees that are eager to grow within your business is a golden key to your business success. If they are willing to learn new skills and gain experience, you wouldn’t need to hire another employee to run that aspect. Of course, this demands on the demand and multitasking capabilities as well.
- Perspective and patience
Instead of focusing on what is ‘small’ think of the bigger picture. When expanding, are you still aligned with your tech company’s vision? How will ‘growing’ in size push your business forward? It’s all about the perspective in which you assess size, and adjust your company accordingly. Only expand when it is necessary.
“Structure your internal processes in such a way that responsibility is shared and that it is measurable.” Martin Ras, Byte Orbit