Don’t Starve your company

Scaling up too quickly can be risky – but moving too slowly can starve your company.

Designer Tory Burch wanted to launch her retail store in New York City during Fashion Week. She had customers, friends and family, media, and a brand-new collection of exciting clothes. There was just one problem. She had no doors to open. The bright orange door that she had custom-designed hadn’t arrived.

She had to make a choice. Should she hold off on the opening until everything was perfect, or should she let the hoards in through the empty doorway?

Burch picked the second option. The day was an astounding success, indicative of the accolades her brand would go on to garner.

Choosing when to launch might be one of the trickiest decisions an entrepreneur has to make. Jump too early, and you may lose potential customers by rolling out an unfinished, unimpressive product that didn’t have time to mature into its potential. But wait too long, and momentum stalls – causing potential customers to wander elsewhere and competitors to get ahead of you.

Business does not take place in a static environment. Things change every minute. An effective leader monitors these changes to gauge when to be patient and when to strike. The true masters of this game are able to strike so fast that they achieve “escape velocity,” leaving competitors in the dust.

PayPal founder Peter Thiel’s rapid growth technique was to pay his initial customers $10 for referring others. Thiel’s tactic worked, but that kind of rapid growth can come at a steep price and with an often messy aftermath.

In the flush of first success, you rarely think about the morning after. You may wake up to some fairly big fires – but let them burn. When you’re a young and lean company, you can also be nimble. Stalling will only choke your momentum.

That being said, not all fires are equal. You’ll need to prioritize which ones get your attention: any problem with the core product or company culture should come before, say, that fancy office upgrade.

If you scale up and find yourself facing a big problem right away, ask yourself whether the issue could kill your business. If there’s a significant possibility that it could, stop and attend to it.