Following the tech scaleup roadmap—or roller coaster ⦨ Navigating the Scaleup Roller Coaster: Avoiding the Pitfalls of Copying Big Corporations Too Early ⦨ Midstage Institute

Following the tech scaleup roadmap—or roller coaster

Following the tech scaleup roadmap—or roller coaster

Doug: So the challenge is to overcome a landscape of obstacles and high failure rates. To lead your startup to a successful IPO. In other words, it needs to become more like a big corporation.

Roland: Wrong. This is another reason we wrote this book. To fight against the tendency to copy big corporations too early. Too many teams that accept that they can no longer act like a startup, try and start to act like a mature company or an incumbent. I find this causes as much damage as sticking with the startup script for too long.

Doug: Really? Is that not the goal of a scaleup company? To grow up?

Roland: It is, but not all at once. I reject the binary distinction of a startup versus an incumbent or mature company. Growing up is a trajectory. Who wants a college kid to behave like a 45-year-old before they have even graduated? Growth companies need to go through different phases. Like kids and young adults do.

People think about startups and mature corporations in too binary a way. Founders want to keep alive the startup spirit. But new executives want things to “turn professional”. Next thing you know, there are consultants and fat PowerPoint decks. Tons of licenses for software that does not talk to each other. And reams of irrelevant process documentation.

“Professionals” who come from mature incumbents feel their habits are the only way to run a company. But they forget that a scaleup’s main goal is not risk reduction, but product-market-dominance. Let alone that it has no budget to deal with “professional best practices”.

Doug: It sounds like a big internal fight.

Roland: That is exactly right. Many scaleups are in constant battle between “startup people” and “professionals”. But what should their battle be about?

Doug: About reaching product-market-dominance! A battle against the competition!

Roland: Indeed. At best, the fights between “startup people” and “professionals” lead to compromise. At worst, they lead to a complete lack of focus on what the company needs to achieve. Rigid corporate processes create bureaucracy where the scaleup needs to stay agile. Hyperspecialization creates huge bottlenecks in responsiveness where the scaleup needs to remain “cool”.

Doug: So what is the alternative?

Roland: It is the model we describe in this book. That there are three main stages rather than two:

  1. The startup stage—before product-market-fit

  2. The scaleup stage—between product-market-fit and product-market-dominance

  3. The mature stage—post product-market-dominance

In the next few chapters, we will start outlining the scaleup stage in full detail, from the freshman phase to the senior phase.

Roland Siebelink regularly speaks and writes about leadership in fast-growing tech startups. You can find more of his insights, including free chapters of his book “Scaling Silicon Valley Style.”