High Growth Handbook
The guide to creating a successful startup
Thousands of startups are founded each year; most of them end up closing or being bought before they reach the phase of hyper-growth, which is the phase when the company begins to scale. Information and advice on how to manage this stage is not so readily available, and this is where the High Growth Handbook comes in, a manual which guides us through the key factors to develop when our startup begins to scale. Elad Gil explains the role of CEO and how to manage a team of managers; he provides tips on how to deal with accounting and finance, marketing and PR, and hiring new personnel, all while the company is evolving and changing, right before our eyes.
Many useful tips to:
- To help CEOs and employees who have to deal with the hyper-growth phase of a startup for the first time.
- To learn to appreciate continuous change in a company, recognising it as a sign of success and vitality.
- To help understand the importance of regular re-shuffles within a startup, accepting internal chaos as its modus vivendi.
We’ve created a new product and customers are buying it: this is where the real challenge begins
When a startup is in an advanced stage, and it is time to scale, the decisions that it makes are fundamental and can determine its future. There are usually three types of challenges. The first is to conquer the market, trying to attract as many customers as possible. The second is about creating a new product, because if we don't keep innovating, our products will soon become obsolete and we will most likely be wiped out by the competition. The third challenge is what Marc Andreessen calls "everything else” that is, building the company around the product and distribution; developing competence in finance, law, human resources, hiring, public relations and investor relations. In the initial phase of a startup, all these factors are set aside, because the focus is only on creating the product and building a sales system that works.
There comes a point, however, where everything else needs to be addressed. For example, when we have a certain number of employees (usually 50) it is the right time to start thinking about hiring someone to deal with personnel management. There also comes a time when it is important to design an efficient distribution system, because the better we are at creating channels that work, the easier it will be to sell other products to our customer base. Mergers and acquisitions are often underestimated, but they are strategic moves that must be taken into consideration at this stage, as is the question of prices, which must be given a lot of thought. There is always a tendency to think that we should hit the market with low prices; on the contrary, setting high prices can provide two advantages. The first is that we will understand whether the product we have created really does serve people (in which case a higher price will not be limiting); the second is that we will have more liquidity to invest in research and development, marketing and sales, so that we can conquer our reference market as we desire.
The key ideas of "High Growth Handbook"
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