Scaling up a business is hard to do. In the US, only 4% of all startups reach $1M in revenue. And of those, only 10% scale to $10M. Of those, only 15% make it to $50M. So that means that your startup has a 0.4% chance of growing to $10M. If you’re a founder and want to grow your business to that level or beyond, this is a scary statistic.
But research proves that there are specific conditions you can establish in your business to help ensure that it will grow and achieve both scale and long term sustainability.
In January of 2019, I had the good fortune of attending an event at TrueSpace. Founder Charles Fred presented some amazing research he had recently completed. For five years, his team was immersed in the daily working environments of 150 companies with $1-2M in revenue. All of these companies were planning to reach $10M in that time period. But only 14 companies made it to $10M. The other 136 either failed or were still below $2.5M.
Fred and his team evaluated the results and identified Five Operating Conditions necessary for companies to scale to the middle market. Then he worked with Gallup to validate the data with 4,000 additional companies. He’ll be announcing the results of this research on February 20 in Washington DC. Then, on February 26th, he’ll share his research with us in Fort Collins.
When I heard Fred present his preliminary results, I was inspired. Fort Collins needs that insight! So I decided to join the amazing FoCo (Fort Collins) Startup Week planning team and create a program focused on helping founders grow their firms.
As a result, for the first time, Wednesday of Startup Week (February 26th) is dedicated to helping your business scale. We’ll hold a series of fireside chats based on Fred’s Five Operating Conditions. In these chats, entrepreneurs who have crossed that $1M revenue threshold in different industries will share their stories. We’ll dig deep into their businesses to find out what specific things they did to reach their first $1M and continue to grow.
Our 13 speakers represent a wide range of businesses from B2B technology to B2C consumer products. Their businesses range from $1M to $110M in revenue. If you’re in Colorado, I hope you’ll join us for this amazing day that’s specifically designed to help you grow your company.
This information also resides on the StartupWeek website. If you visit that site, you can see all the other events happening the last week in February. It’s all free.
Schedule for Scaling Up Sessions
Wednesday, February 26, 2020
The links below will send you directly to the registration pages for the session. Registration is free, but seats are limited, so sign up soon.
If you decide to attend, please find me and introduce yourself. I’d love to meet you!
|10:00||Keynote||The Five Operating Conditions Necessary for Scale||Charles Fred|
|11:00||Fireside Chat||Positioning for Growth||Silencia Cox, Allison Seabeck, Candyce Edelen|
|12:00||Open Networking||Lunch – food trucks available|
|1:00||Fireside Chat||Establishing the Disciplines Necessary for Scale||Michael Stus, Betsy Craig, Candyce Edelen|
|2:00||Fireside Chat||Building the Right Team and Culture for Scale||Dan Holt, Julie Dubin, Larry Dolgin, Candyce Edelen|
|3:00||Fireside Chat||Predictability Is the Fulcrum for Scale||Charles Fred, JB Kellogg, Candyce Edelen|
|4:00||Fireside Chat||Managing Capital and Cash Flow to Sustain Growth||Zubaida Bai, Matt Bryson, Mike Blazes, Candyce Edelen|
|5:00||Keynote||Keynote by Penn Street||Penn Street|
|7:00||Open Networking||After Party Hosted by Barnes and Noble||N/A|
The day will start with a keynote by Charles Fred, who will talk about the 5 conditions necessary for scale.
Charles Fred is a bestselling author, serial entrepreneur and researcher on what makes companies successful. He is the co-founder of TrueSpace, an organization dedicated to helping businesses scale. Fred will help us better understand the processes, cultures, challenges, motivations, and themes that emerge in businesses that reach the middle markets.
Charles is a longtime resident of Colorado, a journeyman cabinetmaker, and an elite masters track athlete. He and his wife, Julie, dedicate much of their time to their family, mentoring entrepreneurs, and giving back to the community.
After Fred’s talk, we’ll hold a series of discussions covering each of the 5 conditions that Fred discovered.
Fireside Chat Descriptions
Learn how to put the 5 operating conditions into practice in real-world settings. Candyce Edelen will interview 12 successful entrepreneurs about how they applied these principles in their businesses.
Positioning for Growth
You can’t drive a ‘69 VW bug 300 miles per hour. It’s simply not designed for that kind of performance.
Is your business in a similar situation? Is it designed in a way that makes it possible to scale past $10M in annual revenue? Does it have the resources, capital, mission and talent to be able to sustain that growth? What needs to change in your business model, offerings, market positioning to achieve true scale? Are you creating enterprise value that will ultimately achieve your exit goals?
Key takeaways from this session:
- Understand how to position your business for growth
- Evaluate the capacity of your current resources, capital, mission and talent
- Determine what remodeling will be needed to attain sustainable growth
- Ascertain the scalability of your idea and offering
Establishing the Disciplines Necessary for Scale
Discipline across the organization is a foundational requirement for scale. If you can build a “franchise-able business” then you can establish the capacity for nearly unlimited growth. This is not to say that you need to establish franchises. It’s about having the operational maturity to build repeatable, reliable processes. This is not something that culture takes care of. If you don’t have discipline in your organization, it won’t achieve sustainable scale. Growth will be sporadic and inconsistent.
Key takeaways from this session:
- How to build reliable and repeatable processes.
- Establishing operational policies, procedures, measurement and feedback processes
- Making sure that your employees understand the requirements and can perform reliably
Building the Right Team and Culture for Scale
The people side of your venture is more important than your product, strategy or funding. In fact, if you have the right team, you can overcome just about any other problem with your business model. But problems with team culture can jeopardize the best business idea, no matter how well it’s positioned or funded.
So how do you recruit the right team from the very beginning, and how do you establish a high performance culture? What are the signs that you have a problem, and how do you fix it? When a company is in launch mode, everyone sprints. But as it grows and scales, the team has to learn to run a marathon. How do you build endurance into the team and culture to play the long game necessary for sustainable growth?
In this fireside chat, Candyce is joined by Julie Dubin, co-founder of No Barriers, Dan Holt, Co-Founder and CEO of BillGO and Larry Dolgin who founded and led The Feet, Inc. for 22 years before a successful exit in 2016. We’ll talk about how these successful entrepreneurs built their teams and established a culture that enabled their businesses to scale past the first $1M and continue growing.
Key takeaways from this session:
- How to avoid limiting growth to the capacity of the founders
- Finding employees and stakeholders who can endure the growth journey
- Building a diverse team with the right mix of people to enable long term growth
- Establishing a high performance culture that also builds in safety and trust
- Approaches for eliminating “group-think” and encouraging team contributions
Predictability Is the Fulcrum for Scale
Chronic inconsistency in forecasting accuracy is a key reason why businesses fail. When you miss forecasts, you risk running through your capital without results. Of the firms TrueSpace followed in their research, 90% consistently over-estimated, over-projected, and failed to achieve sustained growth. To build a predictable business that can sustain consistent growth, you have to establish key performance indicators across the business and constantly test and improve the quality of your assumptions. If you build a measurement culture, you will increase the value of your company.
In this fireside chat, Charles Fred of TrueSpace, and JB Kellogg, Co-CEO of Madwire, talk about the types of KPIs they track, how they used these to report on progress, and the impact on their businesses.
Key takeaways from this session:
- How to build a measurement culture
- Establishing key objectives for each aspect of the business
- Using feedback to improve the quality of your assumptions and the accuracy of forecasts
Managing Capital and Cash Flow to Sustain Growth
One of the trickiest parts of scaling a business is managing cash flow and capital. More than 60% of business failures were actually profitable — they failed because they ran out of cash. Managing your working capital and cash flow is absolutely essential to your business survival. Cash flow management is necessary to avoid cash crunches that prevent you from paying suppliers, buying materials and paying salaries. The problems come when your revenue comes in after your payouts are due. So cash flow management is all about delaying outflows of cash as long as possible while encouraging customers to pay as quickly as possible.
In this fireside chat, we’ll hear from Zubaida Bai, CEO of Ayzh, Mike Blazes, CFO of BillGO, and Matt Bryson, CFO of Madwire about challenges they’ve encountered and how they’ve learned to effectively manage their capital and cash flow.
Key takeaways for this session:
- Figure out the amount of working capital you need to fund operations
- Identify capital risks and prepare in advance
- Types of financing available to shore up shortfalls
- How to speed up receivables and delay payables
After the final fireside chat, Penn Street will deliver a closing keynote. Then at 7 pm, we’ll have scaling up afterparty hosted by Barnes and Noble.
Scale Up is organized and presented by PropelGrowth.