Successful startups will inevitably need to answer the question: are we now ready to scale, to start putting resources in sales structure and repeatability to achieve high growth?
I would argue that there is no “correct” answer, that’s it’s as much an art as it is a science, and that luck and market conditions will play a bigger role than many founders believe. Having said that, there are a few areas that will help move the needle from the art to the science side:
Annual revenue: from two angles, first, it’s proof that people are willing to pay for what you’re selling, and second, scaling means hiring salespeople, and knowing how to pay them starts with how you make money. The exact amount will depend on the market and funding, but the $1-5 million range is a good rule of thumb
Product market fit: are all your customers using your products in a similar way? Is your product solving the same problem? Are your commercial offers to different clients consistent/within range of each other?
Repeatability: do your deals close following a similar pattern? Is it documentable? Do you have the assets to support a sales process?
Customer success: are your customers using the majority of your features?
Technical readiness: can your solution support rapid growth (back-end systems, ticketing & troubleshooting, setup & provisioning)?
Operational readiness: are your company systems ready to support rapid growth (billing & collection, customer onboarding, etc.)?
A final note here: VC pressure notwithstanding, I would always recommend being too late than too early when deciding to scale. Scaling too early is a drain on resources, it’ll distract from the core business, and potentially derail focused growth. As in all things startup, agility and experimentation is your friend here, and starting small is the way to go.
What are other metrics you look at when you consider scaling? Let me know in the comments.
