How To Startup Part 7: Scaling Your Business

How To Startup Part 7: Scaling Your Business

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Image by SvetaZi/ Shutterstock

Congratulations – you’ve found a startup idea, learned how to name your business and successfully pitch to investors and employees, survive a downturn, build a Minimal Viable Product and find Product-Market Fit. Now it’s time “to scale," which is just tech-speak for growth.

When scaling your business, you are setting the stage to enable and support growth in your company for the long run. While rapid growth can be exciting, founders often place their focus on achieving it quickly and lose focus on what matters most. Scaling a business is very difficult, which is why the scaling stage should be thoroughly mapped out. When planning, here are the most important things to consider.

Hiring and Structuring Your Team

So you just raised your Series A or B, and now you’re looking to expand your team for the scaling stage. First, you need great leaders at the key functional areas of your company: product, engineering, marketing and sales. Of course you’ll also need great leadership at the other more support-oriented functional areas – HR, legal, finance, corporate development – but these can come slightly later. Once you have leadership in place in the core functional areas, the scaling stage requires a great recruiting function which allows the company’s headcount to grow. Recruiters are like flag-carriers or drummers in the infantry of an army.

In addition to having great recruiters, it’s important at this scaling stage that the relationship between the three core teams – product, engineering, and sales & marketing – is excellent, since this can make or break a company. Issues almost always arise when there is a lack of trust, failure to assume positive intent, lack of respect for other people’s functional areas and big egos.

Remember that employees who passionately share your vision and feel valued will work hard to help your business thrive. You’ll be able to grow by retaining and attracting top talent, who are loyal, feel fulfilled by their work, and as a result, work harder and smarter.

Building Your Go-To-Market Strategy

So you’ve come up with a startup idea, named the company, raised money, launched a minimum viable product with product-market fit and hired a team with enough organization and motivation to keep the company going. Great work, but you aren’t done yet. Now you need a go-to-market (“GTM”) strategy.

Think about a recent product you bought or an app you downloaded. How did you discover the company? Have they been able to retain you as a customer or user? Maybe you saw a TikTok from an influencer about the product or were referred to a business from a friend. These are examples of conscious GTM strategies devised by the company.

A go-to-market strategy is a step-by-step plan created to successfully launch a product to market. GTM helps you define your ideal customers, coordinate your messaging and position your product for launch. Examples of GTM strategies include creating referral programs for early users to bring in new ones, utilizing channel partners to push a product or service through an existing sales network and mobilizing social media influencers to promote a new product.

Product and Strategy Iteration

Once your product is on the market, you must continuously look for ways to improve it. Here are several common places to look for ideas for improvement:

- User activity. By following how people use the product, you can gather useful data such as what features are used most frequently, which are most avoided, and any unexpected uses of a feature.

- User problems. Even if you think your product is perfect, users will find problems for you. Learn what the major challenges holding back growth are and figure out how to solve them.

- TAM expansion. Ask yourself if there is a new product or feature that will expand your total addressable market.

- Cost and efficiency. Determine whether the benefit of developing a feature or product makes sense from a financial and efficiency perspective.

Other Resources

Looking for more info on scaling? I’ve had some great conversations with successful CEOs about their growth stories and scaling advice on the Office Hours podcast. Listen to my chat with Microsoft CEO Satya Nadella to learn more about the importance of a mission-driven team and leadership mindset plus my talk about growth through adversity with Slack CEO Stewart Butterfield.

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What Tesla's Trucking Feat Means for Natural Gas Vehicles in California

David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

What Tesla's Trucking Feat Means for Natural Gas Vehicles in California
Image from Tesla

Last month, when dot.LA toured the Hexagon Purus facility in Ontario, California, multiple employees bemoaned the California Air Resources Board’s (CARB) ruling on renewable natural gas (RNG) as a hindrance to decarbonizing trucking-haul trucking. They argued that keeping RNG classified as a “near-zero emission” fuel prevented companies using financial incentives like the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, which, as the name suggests, is only available to true zero-emission trucks. The effect, they said, was that the agency was missing an opportunity to accelerate the state’s transition away from diesel.

But over the weekend, Tesla CEO Elon Musk took to Twitter to announce that the EV company’s battery powered class 8 semi-truck had completed a 500-mile trip fully loaded (to the tune of 81,000 lbs). It now appears CARB’s refusal to classify renewable natural gas (RNG) as a zero-emission fuel source was ultimately the right decision.

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Minnie Ingersoll
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Hoopla’s Deron Quon
Image courtesy of Deron Quon.

On this episode of the L.A. Venture podcast, serial founder and angel investor Deron Quon discusses the human side of entrepreneurship and how a founder’s ethos can impact company culture.

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