It was about this time last year, Eric Paley of Founder Collective took the time to warn me about specific challenges in scaling a people business.
The cyclicity of early stage consulting firms was something I had to consider as I prepared to launch Skaled at the time. He advised me to beware of ramping too fast, as that is so often the downfall of companies like mine. Considering the high turnover of consulting clients, we had to acknowledge the risk of taking on too many, too fast — then losing them and being left with a bloated team and a dwindling pipeline.
This was just one of many lessons to be learned in our first year, but in experiencing them first hand, I can now offer my own advice to current and future founders of people businesses like myself.
1. Mo people, mo problems
Your first few people can set the tone for rapid growth — or they can grind progress to a halt.
There are two things to consider in ensuring the former: passion for the space and some relevant work experience in the field. You need people who can hit the ground running. The typical startup technique is to hire smart people and they will figure it out. But if they don’t have relevant experience or a serious passion to learn, you’re not going to have the time or the resources to coach them through it.
2. Plan for the future on Day 1
Our business model was built to help companies put together their initial sales/marketing strategy, and then to help with the transition process.
The problem this creates is a heavy turnover in client base every four to six months, which makes growing revenue very difficult. Planning to extend engagements from the start is how you avoid this issue. Consider the ancillary services that your company can provide (or partner with to provide indirectly) such as staffing or software/systems.
The churn of people businesses is often unavoidable, but extended engagements when possible will always help your company.
3. Market, market, and sell
As the founder of a people business, marketing and selling are the primary tasks outside of building our own internal infrastructure.
These are not tasks that can be outsourced, as nobody knows the vision and issues like you. In order to maintain your sanity, avoid periods of hot and heavy networking. This will lead to a crash and burn, and then you’ll be left scrambling to get back in the circuit whenever you eventually do. Build a healthy amount of networking into each week/month (coffees, events, meetings with peers) to ensure that you avoid a cyclical flow in your client lead generation.
One of the biggest accomplishments in our first two years was focusing relentlessly on the core of our business — the sales process. We clearly defined, refined, and executed on this process to truly prove its replicability in many industries including retail, CPG, hotels, restaurants, brands, agencies, and many of the worlds largest publishers. We kept our process flexible, so that it could expand and contract to fit almost any product. After hustling on the networking side, our sales efforts were a success, and we were able to show our clients how theirs could be too.
It’s rough out there. But let’s learn from our mistakes and make stuff happen. It’s what we do, and I’m willing to bet it’s what you do too.