As part of London Tech Week 2019, we invited a panel of established entrepreneurs and investors to discuss the top five barriers to scaling up a startup. Our last blog covered scouting for and retaining talent and having the right leadership skills. This post will share more of the panel’s experiences of how to overcome growth pains as you’re scaling up:
Access to markets
The UK is a small island nation so to scale up, you’ll
probably have to think global – and that means tackling entry into
- Think through how you will expand out of the UK
market, and do your research as to where the best opportunities are for your particular
product. The USA may be a good choice for other companies, but it may not be
right for you. Irene Graham says, “The opportunity in Asia and Africa is
tremendous… for example, £40 billion worth of cosmetics are bought in China,
but we don’t have access to that market”.
- Find an overseas investor with expertise in your
field. Whether it’s artificial intelligence or medical diagnostics, having
someone who can spot what’s unique about your product and understand the international
market you are trying to break can make a real difference. Poppy Gustafsson
says, “We brought on an investor from every country we were trying to enter. They
could give us information about what people in our market are doing and added
massive validation to us because they saw a reputable name on the product”.
4. Finding the right finance
You might think that raising capital by any means is the way forward - but think again. Irene Graham says, “Getting the wrong finances in the beginning can make a difference to whether your business will scale or not.”
- Be selective about who you want to invest in your company. Do some background research into the investor and the institution they are from as the type of financing you get is important. Some investors have specialist expertise in the field you are trying to enter and may be able to bring in fresh new ideas, provide constructive criticism, challenge the way you think or advise you when you need to pivot your strategy.
- Adapt to your environment. Economic cycles will always exist, and capital flows are moving around very differently today than they did in the past. Michael Hill says, “the speed at which things can change, and how quickly liquidity can disappear, is startling”. We live in a dynamic world that’s constantly changing so having a long-term financial plan is something you should bear in mind. Michael Hill says, “use your investor for advice and help, and a good capital/liquidity strategy… if you have the right shareholder base and liquidity provisions, you can see yourself through financial downturns."
Our final post will look at tips for building the infrastructure of your organisation as you scale.