Scaling your business isn’t the challenge, putting the right foundations in place is!
Entrepreneur Nick Halstead shares four tips that guided the growth of DataSift from Reading to global offices, a Facebook partnership, and $77m in funding
Now in five locations – Reading, London, New York, San Francisco, Canada – the business is expanding rapidly and will soon have a headcount of 200.
Nick is the founder of DataSift, a British technology company that has raised more than $77m in funds. As an entrepreneur, he’s known for having started news aggregator fav.or.it and TweetMeme, as well as inventing the Retweet button.
Earlier this year, DataSift announced its partnership with Facebook, which gives marketers and brands a deeper understanding into the topics that people are engaging in on the world’s largest social platform.
There have been numerous articles written by entrepreneurs that give other founders tips on how to scale their business.
In fact, you can likely list the advice that will be given before you even get past the headline: don’t ruin your recruitment process, continue to hire good people, put the right processes in place, make sure you have strong leaders, do your research before moving into new territories, etc.
The fact is that these are all obvious points and scaling is something that has to occur when your business is successful.
Organisations are only ever ready to grow when there are factors pushing them to grow rather than you trying to force the matter. It simply isn’t a case of hiring more people and expecting your business to grow proportionately and make more money – although too many people assume that this is what happens.
Growth is a factor of success and a good example of a company that scaled in the right way is Plenty of Fish. CEO Mark Frind was the company’s sole employee for years and he grew the business from home, reaching hundreds of thousands of users and millions in revenue.
No huge recruitment drive, no exponential increase in employees and no creaking product or infrastructure. The correct foundations had been put in place from the outset and the product had been designed to scale regardless of how many employees were on board.
When you start to make more money, you can then consider what additional resources are required to support continued growth.
Scaling effectively is all about putting the correct foundations in place so that you’re ready to ramp up when the time is right and the growth itself seems easy. So, here are my tips for putting the right foundations in place:
1. Stay ahead of the curve
Is your product and engineering function something that can scale from the outset? If you’ve invested in the right people from the start and put the correct foundations in place you don’t end up throwing money away on things that are already broken.
The same can be said for sales, marketing and any other part of the business. You must make sure that you’re always a few steps – even leaps – ahead, so you can see what’s needed well ahead of when people realise they need things
2. Get your finances right
It may sound like an obvious one, but you need to ensure all your finances are in order so that when you do scale the business you don’t run out of cash and kill the business
3. Contingency plan
You need to consider what the contingency plan will be if your Plan A doesn’t go as well as you were hoping. When you’re a very small company, you can change direction as and when required but you simply can’t take financial risks when scaling your business
4. Timing is key
Is your company ready to grow and are you growing for the right reasons? Ask yourself honestly whether the time is right or if you’re trying to force the situation
No two businesses are the same but the basic principles for scaling successfully are. Get the right people in place at the start, building the right foundations from the outset, and the rest should start to fall into place.
I’ve seen too many businesses try and force growth, which results in painful transitions in both management set-up and culture. This can be avoided.
Nick Halstead is CEO and founder of DataSift, the leader in Human Data Intelligence. The platform allows clients to capture, analyse and act on all types of human-generated data, including social networks, blogs, news articles, likes and discussions.