The startups that become scaleups and survive in the long term share a number of traits. From the outset, they work incredibly hard and move extraordinarily fast to attract early customers, great talent, and additional funding. Once they begin to scale, successful start-ups maintain their momentum, respond quickly to market changes, and remain focused on outcomes and delivering value to customers. And they realise the importance of controlling costs.
One brilliant example is Spotify. From a humble start in 2006, the two Swedish serial entrepreneurs Daniel Ek and Martin Lorentzon managed to build a multi-billion dollar business, boasting more than 70 million paid subscribers, by changing how people listen to music. The secret behind their success is that the two founders identified a huge opportunity among music consumers, then worked incredibly hard and with relentless focus to reach product-market fit before anyone else in the streaming music space.
Spotify exemplifies the big difference between growing and scaling a company. And it’s not growth, but exponential growth, that startups are after and scaleups are manifesting. This means that if a startup or mid-market company wants to have a shot at making a lasting impact on its industry, they need to grow without accumulating a high amount of overhead.
The importance of controlling costs
Many newly started businesses end up turning over more business, employing more people, and increasing their overheads - but actually make the same or even less profit than when they started up. In the scale-up phase, the complexity of decision-making changes. You have to be smart in the way you do business, create a place where people love to work and implement the latest technologies to sustain your competitive edge.
When you’re scaling up, costs should only increase marginally. One of the most important questions to continually ask yourself is: Can we control our costs? There are more and more stakeholders involved and the level of risk the company can afford declines. It’s important to make calculated decisions in any stage, but at this point, it’s make or break.
The freedom of subscribing
A calculated decision is to subscribe to, rather than invest in, infrastructure that enables your business to grow, such as office furniture. The subscription-based economy has been years in the making, with roots in software and digital media, gradually extending to include more and more products and services. The reason is simple. As startups and scaleups never stand still, neither do their office needs. Subscription includes the freedom and flexibility to scale up or change items. Some subscriptions also include assistance with moving products if your company needs to change offices. This means that you can continuously adapt your workspace to your business needs - with low investment and low risk.