When the economy is in a downturn founders have two options. They can blame the macro environment for their problems be a victim and risk failure, or they treat the downturn as an opportunity and scale their startup regardless.
The Darwinian expression “it is not the strongest that survive but the most adaptive to change” applies heavily to business and economic downturns often require adaption.
Here are 4 hacks every founder can use to scale their startup while their competitors are shrinking.
Leverage People to Scale
People are your startup’s greatest asset, or at least they can be. As a founder and a leader, your job is to get the right people into the right roles. You will know you have the right people when they impress you every time and you will know they are in the right role when they love what you do. If all your people aren’t these two things then it is time to change and to move people around.
Leverage Strategy to Scale
A solid strategy is key if you want to scale. Poor strategy leads to poor execution which means potentially quarters wasted. A good strategy for a startup preparing to scale should be aiming for an industry-leading position and nothing less. Find a niche, a segment or a promise you can make within your industry and aim to completely own that space.
Leverage Execution to Scale
As startups scale, they will begin serving more customers than they ever have before. To survive the pressure this brings startups to need to systemise their execution and ensure maximum repeatability. Whether you are serving one customer or one million customers they will each expect a consistent level of service.
Leverage Cash to Scale
In a downturn money talks and cash flow is king. Startups need cash to scale. Whether you do this through fundraising or improving your cash flow will depend on the market. Reviewing your prices to increase revenue or even something as simple as changing the order of your offerings are two simple methods for producing more cash.
TAKEAWAY: Economic downturns provide opportunities for smart business leaders to seize market share. Founders have four levers at their disposable to start scaling faster, people, strategy, execution and cash. Using all or any combination of these levers will give any startup the best opportunity to scale during a downturn.