A Good Problem to Have? Managing Hypergrowth

Finding that your business has surpassed your expectations, and is growing faster than you ever anticipated is as exciting as it is terrifying. Hypergrowth is something that all companies dream of, but few achieve, and when they do achieve it most CEOs quickly realize that huge growth can have some serious consequences. Managing your cash flow during your period of hypergrowth is fundamental to any start up, or rapidly expanding business.

Learn from the experience

Hypergrowth can be a make or break period for businesses, and for the individuals involved. In order to expand your business quickly, you need to have the cash available to support the growth, including hiring more staff and expanding office space and equipment to house and support your staff.

Aditya Agarwal joined Facebook when the company was still only 15 people strong, and stayed there until he became Director of Product Engineering just six years later. Agarwal’s own startup, Cove, was then snapped up by Dropbox and Agarwal went from 30 engineers to more than 200. No wonder Agarwal says that “most of what I’ve learned in my career has been during a period of hyper growth and change.” Managing your company through a period of hypergrowth can be incredibly stressful and difficult, but as long as you have the cash to support your growth, and commit yourself to learning from your successes and failures, the experience you gain will be invaluable.

Expect the unexpected

When Jiliene Helman, the CEO of Realty Mogul, raised $9 million of funding, the company went from 6 to 30 people in about three months. Helman knew that there would be some growing pains, but there was one issue that no one saw coming, “we didn’t anticipate how badly crippled our organization would be when the need for parking spots quintupled in just one week. Nobody could get into the office on time and our employees suffered numerous parking tickets.”

Don’t get so focussed on expanding that you miss the little things. Of course for Helman, the real issue wasn’t parking spaces, but integrating so many new people and new ideas into a company.

Find the right staff

From his time at Facebook and Dropbox, Agarwal says that during a period of hypergrowth you need people who are:

1)      Fast learners

2)      Comfortable with rapid change

3)      Able to improvise and handle ambiguity.

Hiring the right people to add to a growing business requires a budget that will allow you to hire from the top of the talent pool. According to Helman, “it’s not about just training an employee to do their job, but training the employee on how we expect our team to make decisions and the core values at the company.”

Be a CEO and a leader

Many companies that start small and then undergo a period of hypergrowth undergo a massive change of responsibilities for the CEO. In a small business a CEO might be expected to do everything, from sales, to coding, to marketing. A CEO’s job isn’t to work on the small details, in fact it is just the opposite. Focussing on the small details means that you aren’t leading your people or carving out a future path for your company – important jobs for a CEO.

Instead of doing every single task yourself you need to build a team, and internal processes that allow other people to do the work for you, to the standard that you would expect from yourself. This is a costly but critical venture for any company experiencing hypergrowth. According to Helman, “Once you’ve hired a team for all the roles you used to run yourself ragged trying to fill, you can focus on being a CEO.”

Agarwal advises that, to be a leader, you need to:

·       Scale outside of your own skillset

·       Accept that there will be setbacks and failures

·       Take opportunities to learn, don’t be afraid of new challenges

·       Don’t get emotional.

Enjoy it!

If your company is lucky enough to experience hypergrowth then remember, no matter how overwhelming it may seem at times, you are in a position that most companies can only dream of. Enjoy it and make the most of it!

At J D Factors we specialize in helping companies find the financial solutions needed to survive periods of hypergrowth. Contact me today for more information.