How to Handle Going From a Basic Startup to a Scalable Tech Company

What happens when your traditional business 'goes tech'? Suddenly you're more scalable and efficient, but you risk confusing your customers and losing your company's vision. Here is how to make the transition smoother.

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By Chuck Cohn

Opinions expressed by Entrepreneur contributors are their own.

When I started my tutoring company Varsity Tutors, I envisioned a basic company that focused more on people and learning than it did on data. I thought we could manage everything with Google Docs (and structured the business accordingly.) Well, let's just say I didn't do the best planning.

After a few months, sifting through documents felt like a never-ending treasure hunt. So we decided to make a "one-time investment" in a proprietary database. Almost overnight, our company changed.

Our new system made us more efficient and made our clients happier. We invested in this technology infrastructure, thinking we were boosting the "people side" of our business -- and not immediately realizing we were heading towards another business model entirely.

What happens when your traditional business "goes tech"? Suddenly you're more scalable and efficient, but you risk confusing your customers and losing your company's vision. A startup identity crisis ensues.

But the long-term planning you did around your technologically-simplified model doesn't have to doom the newest incarnation of your business.

Here's what your company can do to shift to a tech-driven model.

Related: Change Habits, Change Your Industry

Create a long-term vision. Anytime you're undertaking a major pivot, you need a long-term vision for how your company will function in three, five and 20 years. Start by clarifying exactly what you hope to achieve, then outline specific goals and tie the changes you are making to the desired outcomes. If your team members understand why their systems are being disrupted, they'll be more likely to accept the changes.

Hire for intellectual curiosity. There will be a lot of changes with a big transition, but your core values shouldn't be one of them. However, you may need to shift your culture to emphasize intellectual curiosity in new hires. You'll want to nurture a culture in which people constantly ask themselves whether there's a technological solution for what is inefficient. Prepare yourself for employees with big ideas.

Use a well-known company to explain your model. Many tech companies have disrupted traditional companies and come out on top. Look for successful companies in your industry or companies with a comparable business model, and use them to explain changes to your employees and target audience. For instance, Oyster has been touted as "Spotify for e-books." People immediately get the comparison, which defuses customer confusion.

Related: Disrupting Behavior: 4 Companies Boosting Business By Changing Behaviors

Prepare to hire an army of developers. If you want to be a tech company, you need talented developers on your team -- and lots of them. No major product you build will ever work perfectly, and each will be a function of dozens of incremental improvements. But you'll never be able to get beyond fixing bugs if your developers are overwhelmed. You need enough bandwidth to build on ideas that could dramatically change the course of the company.

Gather feedback frequently. Your team members are the ones in the trenches, dealing with the things that need to be improved. Gather suggestions from them at least every two weeks and implement the good ideas quickly. The tech world is fast-paced and casting your idea net wider will keep you in front of new developments.

Prepare for pushback. There will always be people who resist change -- even with excellent communication and cultural adjustments. The biggest challenge will be convincing everyone that a tech-based platform will dominate a labor-based one. The bottom line is that labor-based functions in your company must add value for the end user.

The secondary challenge will be oriented around short-term frustrations with the real or perceived shortcomings of your systems. Nothing works perfectly right away, but you can ease your team's frustration by getting your development team to fix the most annoying bugs first to make sure your operational team members can do their jobs.

Transitions can be daunting, particularly when transitioning from a traditional business model to a tech-driven one. You may not currently feel overwhelmed by your traditional processes, but don't wait until you're drowning in Google Docs to pivot to a tech-focused mindset.

Your customers deserve a seamless experience, and your team deserves efficiency. So skip the identity crisis and begin reinventing your company with clarity and a bold, long-term vision to disrupt your industry.

Related: How to Get Your Startup's Technology Up and Running Today

Chuck Cohn

CEO and Founder of Varsity Tutors

Chuck Cohn is the CEO and founder of Varsity Tutors, a live learning platform that connects students with personalized instruction to accelerate academic achievement.

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