Philip Rooke, CEO, Spreadshirt
Running a company is not very different from raising a child—in order to get from childhood to adulthood, the dreaded awkward period, which we call “business puberty,” must be managed at some point. Just like a gangly child, when a business grows rapidly, it brings new problems such as competitors, managing team members, product changes, and much more.
You know that you have hit business puberty when the cute start-up era is over and things change over quickly and extend beyond your control. Even investors and customers stop seeing you as a young new arrival and start expecting you to behave like a grown-up.
At Spreadshirt, we just hit 15 years as a self-expression e-commerce platform and have learned a lot of growing up in the last few years. Being profitable for many years now, we realize it is hard work and not always straightforward. Our team is very proud of our collective ability to consistently deliver great results even if the marketplace is unsteady.
As CEO for over seven years, I have learned quite a few things and below I’m sharing a few tips from my playbook that might be helpful for companies to make it through the business puberty and land on the relatively safer shores of business adulthood.
1. Focus On What You Do Well
Just because you can do something fast, it does not mean that you should keep doing it and try everything. Start-ups love to move fast, break through, and mimic companies like Facebook. While it is tempting, trying too much ultimately ends up with a company that does lots of things badly. At Spreadshirt, we mistakenly worked on too many customized or individual solutions that were aimed at single partners to build unique brand stores. As we grew and expanded into new markets we realized it’s more important to have the satisfaction (and profit!) of doing a few things really well.
Our takeaway after those attempts is to keep things simple and focus on reducing complexity. With our heads down and doing what we do best, we achieved steady profitability and were well positioned in the industry when other competitors entered the print-on-demand merchandizing space. Profitability and a well-structured business is the key to ride out the arrival of disruptors. In order to expand internationally, everyone must concentrate on doing a few things well to successfully scale.
2. It’s All About Profit
Profit buys safety and can help deal with the wave of “me-too businesses” that will inevitably follow. Any established company or new technology will incite industry disruptors to challenge all or parts of a successful business.
Profit enables thoughtful risk-taking. Once a business is profitable, it can take risks and still survive if things don’t work out. Even a grown-up company must refrain from being totally risk-averse, because without change, a competitor could steal a great idea and grab the market.
Profit also buys more potential investment, enabling an enterprise to scale quicker and have access to the right resources when needed. The keys to successful growth are profit and agile teams staffed with great talent.
- Dealing With Bad Attitude
Growing up can make people moody. It is hard to move on from the cool, start-up world and take the leap towards a full-fledged business. But disgruntlement (and managing it) is part of growing-up. It is feasible to become a mature business without losing the fun and popular factors from start-up mode. Communication with all staffers is the key here. What are the parts of start-up life they like? What can you afford to take with you? At Spreadshirt, this was the reason we recruited a Feel Good Manager six years ago—somebody tasked with keeping the good vibes alive and embedded in our workplace culture.
Talent management is critical to navigating business growth. An empowered and good team can keep the business out of trouble. They have the ability to be calm in a crisis and know when to take risks. Some new ideas pay off and other don’t, but with a seasoned team you tend to win more than you lose.
Ongoing talent development is crucial to keep employees engaged and motivated. In scaled companies that are concentrating on doing few things well, the team motivation changes since it is no longer about doing something new but rather about doing something better. This changes the team dynamic from staying up all night to launch something to bringing a fresh and focused mindset to continually make daily improvements. The existing talent must embrace this culture shift and they respond well to more empowerment, training, skill development, career progression, and work life balance. If you want to hang onto the good people, you are going to have to accept this change.
4. Adult Supervision Required
Ah, the grown-ups. A start-up often launches with a very young team, but getting to business maturity usually means expanding the management team.
Sometimes it requires tempering the enthusiasm of the founder with a wise old CEO who’s seen it all before. Managing a growing business is distinctly different than at a start-up where everyone can easily talk to each other, or frankly just overhear everything. In a start-up the founder is king and can change things fast because everything is new and the team is small and nimble.
A scaled business is very different and requires varying communication practices. Currently, we have 750 people across six venues, scattered across two continents and with fifteen years of doing things in certain ways. We are only agile when all the different parts are empowered. This means the job of the CEO changes to empowering people and keep them heading in the same direction rather than acting as a dictator.
The only way to guide a steadily growing organization from start-up childhood mode, through the awkward years of business puberty to adulthood is solid leadership. Hallmarks of adult companies are improving margins, maintaining consistent profit, generating a good set of assets, keeping a solid balance sheet, and attracting investment and talent.
Navigating a business through growth is as challenging as launching a new enterprise. It’s hard work, and like real teenagers, the world cuts you less slack than your cuter younger siblings. But acknowledging the awkward growth years and planning for them can be the first step towards navigating business puberty successfully.
Online retailer Spreadshirt is No. 500 in the Internet Retailer Top 1000 and No. 266 in the Europe 500.
Favorite