Focusing on Speed When Building Your Company is a Mistake. Here’s Why.

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One of the most interesting phenomena I’ve seen over the last two decades in startups is the fascination with unicorns. The term arose at a time when startups worth $ 1 billion were rare, something only the luckiest of founders could ever glimpse. Unicorn production is now reaching the scale of industrial agriculture.

But the founders should not be underestimated if they do not aim to achieve Unicorn status. In my experience, one of the main reasons why companies fail is to try to grow as fast as possible without taking the time to grow in the right way. It is a tale as old as the turtle and the hare. In business, who wins the race?

Too much, too fast, too soon

It seems that many investors are pushing companies to “grow at any cost.” However, we only need to look at WeWork to see what happens when a business grows too fast without enough substance to support it. WeWork raised billions of dollars by renting coworking spaces across the country and it seemed like a miracle business. But when he tried to make himself public, inadequate management and inadequate business practices were revealed, and WeWork collapsed as quickly as it had taken center stage.

Over the last 20 years, I’ve seen countless cases like WeWork: startups that burst into stardom and then collapse a year or two later.

So why is this trend happening? Too much growth, too fast and too soon compromises success.

Don’t get me wrong, quickly building a business without compromising on its future is the ideal scenario. But that’s all: an ideal. This is not the norm, and this is not how sustainable growth always takes place.

In 2016, my business was making millions of dollars and growing at the speed of light. With all the growth, I didn’t even wonder if the basics weren’t right because, at first glance, everything seemed to be going well. When we realized we were missing a key element of our business, we had to cut our employees in half and regroup to build a new product that would sustain us in the long run.

It is all too easy to justify misjudgment and bad business habits by pointing out the massive growth that is taking place. However, the next thing you know, you will have built a skyscraper on a faltering foundation, and inevitably one day the wind will come and make it all fall.

Related: 3 Growth Strategies Small Businesses Can Learn From Google

Sustainability above speed

The business that is being built quickly without a long-term strategy will often lose out to the business that is being built slowly but strategically, planning every step you take.

A company shouldn’t always go from 20 to 200 employees just because it raised $ 10 million. Every new hire is an investment, and it’s best to make sure the company is ready for them. If a company hires a new developer for $ 130,000 a year without a clear plan, and it takes the developer two and a half years to create the $ 130,000 recovery software, the company may not be making the best use of its resources. . If the company knows exactly what a new developer will create and generates software during the first year, accumulating $ 500,000 in return, the company can afford to give that developer a raise. i hire even more people. That is a scalable business model, and can’t be achieved if you hire more people simply because you raised more money.

The surest way to build a successful business is to find the smallest repeatable process you can complete that creates value for your customer. Invest all or most of your effort in this process, and once it works well, you can start adding more layers: increase prices, add customers, add new employees, and create even more value.

Related: 10 Steps to Achieving a Business Growth Mindset

More is not always better

A reliable sign of growth is the efficiency of capital: how effectively a company uses the money it has raised. The company that turns $ 10 million into $ 100 million is a healthy, growing company, but that’s not necessarily true for the one that started with $ 200 million and now only earns $ 100 million.

Looking at long-term sustainability is almost always more important than immediate rewards. If you go through all your initial capital trying to become a unicorn, your business will be on a tightrope and at the mercy of your investors. Focusing on capital efficiency gives you room to breathe as you grow slowly but surely.

Finally, don’t be afraid to shrink. When we had to reduce our employees from 50 to 25, I thought the best way would be to lay off as few employees as possible. Over time, those numbers went down until we had only seven employees. If I had cut from 50 to 10 with a view to the future, I could have offered these 10 employees stability and security, even if we had to work slower because of reduced capacity. When we think that “more” is always better, it can lead us to make decisions that may not benefit our company and employees in the long run.

Related: 8 mandates for growth

Build an engine

Ironically, prioritizing sustainability may be the fastest way to grow. You you can build a strong and healthy business i grow rapidly. But reduction and growth are not the metrics we need to worry about. We have to focus sustainability.

Building a business is like building a car engine. Many people rush to build the engine as fast as possible so they can start driving right away. But with a poorly built engine, our car will stop in the middle of the road, leaving us stranded. If we want to build a sustainable business and reach our ultimate destination, we need to take the time to build a suitable engine that to know it has the power to take us where we want to go.

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