Xcelerate Financial Blog

Three Proven Ways to Successfully Scale Your Startup Business

Posted by Evan Tarver on Jun 30, 2017 1:45:41 PM

We live in a “scale or die” type of world. If your company isn’t growing, it’s shrinking.

It doesn’t matter if you’re the CEO of a Fortune 500 company or a solo-preneur trying to launch a consulting business. You’re going to be judged on your ability to increase your book of business whether you like it or not.

Now, if you’re trying to build a lifestyle business that supports your way of life, chances are you don’t care. Judge me on my lack of growth while I sip mai-tais on the beach! you’re probably thinking to yourself.

However, if you’re the leader of a funded startup, or if you have aspirations of raising money, then you care very much about your scalability. So, to help you and your business scale successfully, we’ve outlined three effective ways to do just that.

You can choose one or you can choose all, but at the end of the day, the result is efficient scalability.


Seth Godin, New York Times bestselling author and superstar marketer, said it best: Product launches aren’t important. Companies shouldn’t try to explode like a flash in the pan, but rather grow with slow and steady momentum.

Godin calls it growing “fungally,” as in, grow like a fungus. Sounds gross, but it’s a great analogy. A mushroom starts with a single spore, and over time, it grows in the dark to become one large organism that spans miles. That’s how your business scales with this approach.

If fungi are too slimy for you, think of it as scaling “out” before scaling “up.”

When you scale your business up you essentially flood the market and try to attract as many consumer-types as possible. You have your ideal customer but you choose not to niche down and target that profile first. Instead, you choose to onboard as many customers or users as possible, focusing on vanity metrics rather than product-market fit.

Instead, companies that scale successfully do so by growing outward first. They identify their ideal consumer and work to create and refine the best product for that person. And then they focus all of their resources on dominating that niche market.

By doing so a business can create a platform that services a single user base. It’s able to find out what works and what doesn’t, so when the company’s ready to expand to other consumer types, it’s ready to do so.

Think about scaling too fast. Going from 2,000 to 25,000 customers overnight may sound great, but imagine servicing that many users without understanding your core consumer. It’s impossible, and you run the risk of losing consumers because you on-boarded them before you were ready.

So, focus on growing fungally. Grow slowly and learn from your mistakes, because we all know you’ll have them. Test your product, platform, and assumptions one piece at a time.


While the first option for scalability focuses on slow growth, this opportunity advocates for quite the opposite. Bear with me.

Twitter started as a podcast company. Slack began as an internal communication tool for a separate business. Often times a company’s first assumption or business model is wrong.

So, rather than growing slowly, some companies decide to flood the market and let its wide-range of customers decide where their product fits. And sometimes they figure out that the product they have isn’t even the product they need.

Take Basecamp, for example, formerly 37Signals. The company was a product development company that built management and efficiency tools. It generated modest success among its user base until it launched its now flagship product, Basecamp.

I’m sure you’ve already realized that the product was so successful that the company rebranded itself so its business was synonymous with its best-performing revenue generator.

If they’d chosen the strategy above, they might have tried to push their initial product into the ground. Instead, they built multiple products and then went the most successful one.

Companies that scale through change expect change to happen. They welcome and embrace it on the horizon. In fact, they consider it essential to their survival and scalability.


Waaaaaaaaat??? you’re probably saying to yourself, rolling your eyes. But wait! Don’t close your browsing tab just yet.

It sounds counter-intuitive to scale by not doing so, but it’s true. Paul Graham, serial entrepreneur and co-founder of the massively successful Y-Combinator, says it directly. “Do things that don’t scale.”

Hey, if it worked for an industry-leading incubator, one that helped launch Reddit and Rapportive, it should work for you, too. According to Graham, if you can do the following, you’ll end up scaling without trying to scale at all.

First, recruit users and customers manually. Find the people who will give you the most honest feedback. The founders of Snapchat, for example, would stand outside public places and ask people to download the app on their phone and try it so they could figure out usability.  

Second, and this is a leaf out of the fungal growth strategy, is to keep your existing customers happy. In fact, place existing consumer happiness over acquiring new users. Remember: It costs 10x more to onboard someone knew than have a repeat purchase. And last time I checked recurring revenue was a great way to scale.

Third, deliver an amazing product. Take Airbnb, for example. The founders used to go door-to-door and take photos of apartments that were up for rent. Rather than trying to scale through a multitude of half-assed listings, they instead decided to make their existing listings look amazing and rentable. Then, as their consumer base grew thanks to the amazing product, they started to focus on inventory growth.

All in all, none of these things scale, and all of these companies are now worth multiple billions of dollars.


Regardless of the route you choose to scalability, you should plan that you will, in fact, scale. Set your company up to succeed, not fail.

Ensure that you’ve created automated processes, outsourced non-essential needs, and have the right employees in the right places. Create a marketing budget. Even if you don’t know what you’re going to market or even where you’re going to market, make sure that you have money earmarked to deploy when ready.

And above all else, keep moving forward. Activity is better than nothing. If you’re unsure how to scale, feel free to contact us for more information.

Xcelerate Your Business

Our mission is to help startups and mature companies thrive through insight and actionable steps, which in turn Xcelerate a business's performance.

Xcelerate Financial offers companies a full spectrum of accounting and financial outsourcing services which help increase productivity and profitability.

We currently serve clients from many industries, including internet start-ups, established traditional companies, and software/technology companies. 

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