Growth Strategies

Top Mistakes Start-ups Make When They are in a Hurry to Scale Up

It's important for entrepreneurs to realize that while growing their business, it is better to take one step at a time
Top Mistakes Start-ups Make When They are in a Hurry to Scale Up
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Entrepreneur Staff
Senior Correspondent, Entrepreneur India
3 min read

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Haven’t we all heard stories about start-ups functioning out of garages or one bedroom apartments and then exponentially growing to not just one swanky office but many such offices across the globe.  Every entrepreneur harbours dreams of scaling up his/her business to achieve unparalleled success. But while driving on the path of success, there come many hurdles.

Many entrepreneurs end up committing a lot of errors while expanding their operations. Entrepreneur India spoke to founders and mentors about what are the biggest mistakes entrepreneurs should avoid making while scaling up.

Growing Across Verticals Simultaneously

It’s important for entrepreneurs to realise that while growing their business, they take one step at a time. Doing too many things at once and across regions will only hamper their growth for the focus too will be all over the place. Amit Mishra, founder of id8vc, believes that it is one of the biggest mistakes entrepreneurs make – not looking at one vertical or one region at a time. “Even when you look at Gurgaon or Noida, there is a huge disparity in the way products are accepted. So, an entrepreneur needs to look at one expansion at one time,” he said.

Agreeing with him, Abhishek Daga, founder of Thrillophilia said that growing too fast horizontally across multiple categories is a terrible decision. “It comes at a very steep cost due to lack of knowledge and leaves a big hole,” said Daga.

Not Investing in the Right Things

For a start-up, having the right tools to help you scale is important. Daga believes that every entrepreneur needs to invest in the right tools to solve problems be it like data analytics, heatmaps, automation, chatbots, monitoring tools etc. “Tools help you grow fast where you can test most of the things on subscription model before building anything from scratch,” he said. He added that not building technology or setting up processes to speed up execution will lead to inefficiency.

Meanwhile, Mishra is of the opinion that putting money on marketing when it’s needed is another error that start-ups make. “This money can instead be used to acquire more customers,” he said.

Not Giving the Core Team A Chance to Lead

When you are expanding exponentially, it is essential that the vision of the company remains unchanged as you go down in the hierarchy. While growing the business an entrepreneur also hires at a fast pace. However, Mishra believes that while hiring local talent (in the city you are expanding into) is a great idea, the vision of the company might get lost in translation. “You need to involve your core team and give them more space. Entrepreneurs often try to micromanage by hiring local talent but having someone from the founding team lead operations in the new city for some time at least, will help new employees understand company policies,” he said.

Don’t Aim For the Moon

It’s obviously great to have big ambitions and dreams. But it’s also important for the entrepreneur to stay rooted. This is one philosophy that Daga believes personally. “It’s important to set up realistic monthly or weekly goals and keep achieving them,” he said.

While start-ups are supposed to have the ability to grow fast, they should always set targets that they can achieve. If not, it accounts for not just monetary loss but also the energy of the team.
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