Finding a product-market fit is a difficult exercise. However, the past several months has taught me that scaling an organization can be equally hard as well. The community (media, venture capitalists, founders, employees, and customers) tends to measure a company’s progress by looking at the following metrics:

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Revenue (MRR, ARR)

Customers (# of customers, churn, engagement)

Profitability (gross margin %, cash flow generated)

Headcount (# of employees, retention, % of referral hires)

Office Space (square footage, number of locations)

Geographies Served

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The irony of these metrics is that the most successful companies often have a counter-measure in place to make sure that they’re scaling the right way.

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Revenue: Is the revenue margin accretive? What is the associated cost of acquisition/retention?

Customers: Are you bringing on the ‘right’ customers? Have they come on with an expectation that is different from what you deliver today? What is the expected lifetime value of a customer?

Profitability: How much leverage are you applying to the business? Are you re-investing in the business appropriately?

Headcount: Do you really have a need for more employees? What new skillset/mindset is the new employee going to add to the team? Are the new hires capable of taking over your job? Can you learn from them?

Office Space: Is there a need for additional office space? Have you considered creating a flexible/remote working environment?

Geographies Served: What are the new complexities that come with expanding geographies? Have you considered regulatory impact?

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More often than not, organizations tend to end up in one of two scenarios:

Scale too fast: The company rides the wave on the back of ‘unhealthy’ growth which can come in the form of mediocre employees, poorly aligned customers and technical/process debt. This causes organizations to unravel and make difficult choices such as firing employees, high customer churn and large portions of time spent coordinating vs. doing actual work.

Scale too slow: The competition ends up catching up and capturing a dominant portion of the market. This often leads to a soft landing and creates a sub-optimal outcome for both founders and employees.

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So how does an organization scale with the right balance of fast and slow ‘progress’? It really comes down to the practice of doing less the more you grow.

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Introduce tools and processes that reduce the steps needed to achieve business outcomes

The number of steps required to generate $1 of revenue should decrease over time.

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Focus efforts on the big problems

Each employee should have 1–2 objectives that can be achieved with 75 market % certainty.

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Work in smaller teams

Teams should operate in ~5 people units. Each unit should be working toward 1–2 measurable objectives and be empowered to make their own decisions.

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Focus on a very specific customer market

There needs to be a high degree of consistency between each sales pitch (collateral, discovery questions, fulfillment process). The specificity of the target customer needs to be balanced with the overall size of the market.

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Overall, it takes a lot of discipline to scale the ‘right way’ and not let vanity metrics determine your actions. The constant tension between moving fast and slow is part of the scale-up journey.