Scaling is Caring: The How-To Guide to Manage Fast Growing Companies

More startups fail than succeed, but some manage to have incredible growth and we call these gazelle companies. Yes, that’s because they run fast, but that’s not all. A gazelle company is “a high-growth company that is increasing its revenues by at least 20% annually for four years or more, starting from a revenue base of at least $1 million. This growth pace means that the company has effectively doubled its revenues over a four-year period. As gazelle companies are characterized by their rapid growth pace, rather than their absolute size, they can range in size from small companies to very large enterprises” (Investopedia).   

What should other businesses do to follow the same path, without messing everything up? Making the decision to scale your startup is an exciting process that has the potential to bring significant success to both your business and its founder(s). Sounds easy? Well, unsurprisingly, it isn’t. Scaling a company isn’t a smooth thing to do, as the changes needed can derail even a previously successful business.

But what about us? Since 2008, Stylight has established itself in 15 markets across three continents, now reaching over 10 million users every month. A huge growth that, of course, results in a tremendous number of employees: just think that in 2013 Stylight counted on less than 60 team members – a number that has now increased almost fourfold, with more than 200 employees from more than 20 different countries. Challenging, but, moreover, stimulating and exciting.

In order to better understand the topic, we asked Dr. Claas Triebel, Stylight’s HR and organizational consultant who has worked with the team of founders for 1 and half years since the very early days of the company. Claas is also Professor of Economic Psychology at the School of Applied Management in Erding and owner of the consulting firm Perform Partner, that has been working with various startups and young companies for 10 years.

 

With the number of employees growing by >20% in 3 years and 1.35 million jobs created in 15 years, gazelle companies seem to be in business heaven. Can you name the 5 main strategies behind this ‘fast’ success?
Growth is always thrilling. It fascinates people and people want to know the mechanisms behind successful growth. The reality is, we cannot identify a unique factor responsible for growth and success. And if we did, we would have solved the biggest enigma in global economics. It’s good to know, however, that we can identify strategies for dealing with growth:

1. People should realize quite early on that they have not only to build a product, but to build a company. These are two completely different things.
2. In a fast-growing company you don’t need managers, but people who think and act with an entrepreneurial approach.
3. Growing companies should constantly learn, but not imitate. What has been good for another company is not necessarily good for you.
4. In order to grow in a sustainable way, you not only need a vision or an idea, you need values and you have to align your goals with these values.
5. Last, but not least, people should always be willing to learn. Things change rapidly in a fast-growing company, so strategies and approaches that worked yesterday might not work tomorrow. This may not be very comfortable, but can be really, really interesting and stimulating.

Can growing so fast mean trouble?
Yes, without a doubt. Growing fast can be thrilling and kind of dangerous at the same time. Imagine a group of people, same age, same qualification, same income, being friends and, all of a sudden, becoming very successful and business partners. These kinds of events change people’s lives. And some founders in this kind of situation will act the same as celebrities at the beginning of their success: they tend to forget where they came from when their star is on the rise, and they start to think that they are the greatest. This mix of success, self-esteem and, as a consequence, chaos, is sometimes an existential obstacle for further growth and success. This is something that, luckily, didn’t happen at Stylight: our founders and management can definitely be proud that (as Basti Schuon recently said in an interview) “Nothing has changed at Stylight. We now have over 200 employees and us four founders are still not only business partners but also friends”.

How did Stylight manage its rapid growth?
The four founders of Stylight realized early that they not only have to create a product and a business, but have to develop a company. And a company consists of people. They are also very good at recognizing their own limits and other people’s abilities. And, of course, they are very competitive concerning the market. I identify this mix of caring about people, modesty, and competitiveness as the main reason for the sustainable growth of Stylight. And I can observe this mixture through all levels of the company. Which is not only sustainable and successful but, in my eyes, also very likeable.

What is the main added value of having cross-functional teams in a fashion-tech company like Stylight?
When a company starts growing there will be a point from which you have to build up departments. People start working in their departments not knowing what happens in the others. Sometimes they are not interested in the topics of the other departments, and sometimes, even worse, they start to compete with them: fighting for budgets, holding back information and other such strange behavior. Cross-functional teams are the best way to avoid these kind of bad developments. Putting tech-people together with people from finance, marketing and business development helps to keep the startup-spirit, even when you are already a successful company, because almost every company begins with cross-functional teams and gets in trouble when its growth drifts this creative mixture of disciplines apart.  

And as growing also means feeding the increasing demand of a team’s needs, last year Claas moderated our very own World Cafè. Sorry, ‘World’ what? If you want to know more about it, just read our blogpost about how companies can involve their employees in their growth process.

 

|By Ilenia Sarman|