Easing the tough transition from startup to SMB

GETTING a startup up and running can be an incredibly challenging task. However, taking it up a notch can involve even more tough work. The process, according to senior vice president of Startup Ecosystem and Accelerator at Oracle, Reggie Bradford, “is a marathon, not a sprint”.

“Just as when you run a marathon, you will experience different stages along the route, and each of them represents a different challenge for you as a leader,” he said.

According to Bradford, the early shift from startup to SMB can be the most daunting and difficult change. Leadership characteristics which may have worked well in the startup stage could turn out to be less successful following the transition.

“Making the transition may mean shifting your leadership style, of course without sacrificing your ideals and brand, or even assuming a different role while bringing on others who can provide long-term leadership for the company,” adds Bradford.

In the evolution from being a startup to a sustainable and profitable SMB, the willingness of the leader of the company to learn new skills, broaden their horizons and modify past leadership behaviors in order to meet the evolving needs of the enterprise are critical.

“There will come a point when you have gotten large enough that it’s no longer possible to operate that way. When you go from a couple of customers you know personally, to a customer base big enough to track in the cloud, or when you have a scalable business, you’ve moved into the ranks of the SMB,” says Bradford.

In a study published in Business Horizons, Joseph Picken, the study’s author and founder of the Institute for Innovation and Entreneurship at the University of Texas at Dallas, outlined eight hurdles of the transition from a startup to an organization of profitable growth.

The eight hurdles Picken outlined are:

1. Setting a direction and maintaining focus
2. Positioning products/services in an expanded market
3. Maintaining customer/market responsiveness
4. Building an organization and management team
5. Developing effective processes and infrastructures
6. Building financial capability
7. Developing an appropriate culture
8. Managing risks and vulnerabilities

The likelihood of making a successful transition from a startup founder to the CEO of a public company is rare, according to Bradford. In order to maximize success during this period of transition and business growth, it is critical for leaders to recognize their own blind spots.

“The skills required are entirely different. Start now to add people to your leadership team who are smarter than you are, people who have more experience and have been through these kinds of transitions before,” he said.

As the demands of the founder’s time escalates, it is no longer possible to take part in every decision and every piece of the operation.

Though the transition from a startup to an SMB comes with many challenges, technology is a powerful tool to help make the transition smoother while maintaining an optimistic and effective company culture.

It is a great time to be an entrepreneur, with technology such as the cloud giving you access to a breadth of tools and resources designed to aid the development of your business. Using the cloud in order to more effectively analyze data and gain helpful insights can be particularly useful at this stage.

“Having information at your fingertips via the cloud will let you evaluate markets, opportunities and decisions with greater confidence. You can be a lot more enthusiastic about your SMB when you’re able to make decisions based on solid, data-based insights,” said Bradford.

The utilization of online communication platforms also allows your organization to discuss any issues quickly, whether talking to an employee a couple of desks away or on the other side of the world.

“Making the right decisions, using the right technology, and being honest about your limitations will help ensure you have a culture and a company that can survive for the long haul,” said Bradford.

---

---

---