Scalewise aims to give you access to expertise from people who have been through the same scaling challenges you’re facing right now. This is the second article of the series where Scalewise’s Coaches talk about what works and what doesn’t when scaling between Series A and B.
I’m Edwin Abl and I’m an advisor at Scalewise. In my career, I’ve helped several companies take that challenging step from Series A to Series B. In this article, I’m going to talk about three mistakes I’ve seen companies make during this stage of their business. I’ll also give you three actionable tips to maximise your chances for success.
Scale-up Problem 1 – Not building scalable systems & processes
The companies that succeed put the processes and systems in as if they’re already on $15M ARR. They build an integrated go-to-market function aligning marketing, sales and customer success. They consider how to harness automation to drive scale, even at an early stage. They try to fix issues before they arise and become harder to fix.
When they start looking to raise the Series B and investors do their due diligence on processes (as they will), they are in a much better position.
Scale-up Problem 2 – Unnecessarily pivoting to new markets or segments
Too many companies get ahead of themselves, believing they’ve figured it out and they’re on a path to success, when in reality, it’s far too early. Then, they go and pivot to enterprise or expand to new geographies, when they didn’t need to. Of course, it doesn’t work.
Make sure your GTM is well-aligned with your product. Before you pivot to enterprise, make sure you have an enterprise-grade product (or at least something that can be sold to enterprise once you figure out how). Far too many founders believe enterprise is a magic bullet because the deals are so much bigger. But, you have to do it at the right time.
The same goes for geographical expansion. Make sure you have the resources and structure in place to achieve success. Ignore the pressure to follow certain strategies for growth. Don’t follow the fads or just do something because everyone else is doing it. Instead, get advice from experts. Take time to really understand your Ideal Customer Profile, Total Addressable Market and accounts – your GTM. Align your focus carefully in stages, keeping your process in mind.
Scale-up Problem 3 – Being too conservative on geo-expansion
In my experience, when we’ve just given it a go, we’ve found there’s not much difference in terms of playbooks. Once we start winning business, we build off that.
If you’ve built some traction in the UK, look at Nordics and Benelux – similar sales markets with lower barriers to entry. You won’t have a brand presence, but you can still win deals by following similar processes to the UK market. Build solid foundations and plan carefully for broader geo-expansion. Often, you will need more resources on the ground. Don’t spread yourself too thin. Commit to it. Give it the right resources and support. Build the global business that investors want to see.
Now, here are my three pieces of tactical advice for companies looking to raise a strong Series B in the future.
Tip 1 – Keep your value prop and ICP fresh
At Series A, you have some leeway to just crack on and try things. But at Series B, you need to be absolutely clear on what you do – and for whom.
Defining your value prop should be an ongoing process. Keep going back to it with a view to iterating. Structure the way you get feedback from your customers around what they’re thinking and the challenges you solve. The more clarity you have around the problems you solve and where you fit in the market, the easier you’ll find everything else.
The same is true with your Ideal Customer Profile. Your ICP is what makes your messaging sharp, concise and impactful – because it is specific. Always look to narrow your ICP down even further. Precision leads to confidence and a message that resonates.
Tip 2 – Keep building momentum (with one eye on the long term)
At Series A, investors are looking for potential. For Series B, they want to see proven, consistent revenue growth. You won’t scale by solely adding salespeople to your business. You have to be smarter. Match your roles to your priorities and the resources you have at this present time.
My advice is to think about the pipeline you’ll need to support your salespeople and make them successful. If your salespeople won’t have enough leads to keep them busy and productive, make sure you hire reps that are good at outbound selling or build an SDR team! You need a plan for creating a predictable, scalable pipeline – not just a sales-headcount-driven revenue model.
Tip 3 – It’s all about the people
My final point is if you don’t get the people side of the business right, you’ll struggle with everything else. We’re in a world now that anyone can work for anyone anywhere. That means competition for talent is huge. You could have a great product and offer decent money, but you won’t attract the people you need to achieve the scale you need without that little something extra.
I believe the only way to do this is through vision, passion and people. Do whatever you can to build a cohesive, connected unit of people that believe in what they are doing. Get them excited and empowered by it. Invest in their development.
This gets harder as your headcount grows, so get your culture clear from the start. The next and harder step is maintaining. It’s a continuous investment in time, effort and energy. I find that far too many CEOs talk a good game about ‘culture’, but few actually deliver on it practically, building sustainable, high-growth businesses. The ones that do care, succeed.
With the best talent, a good product and the right systems and process in place, you’ve got a fantastic shot at being very successful.