Joe Leech

Traps for scale-ups and how to avoid them

I’ve worked with many scale ups over the last few years, from successful growth to IPO. Here’s some of the mistake I’ve seen.

Trap 1: Too many initiatives too early

We’ve split the product team into four groups. Each focused on our four areas of expansion. B2B, B2C, marketplace and enterprise.

Overheard at a scale-up

Expanding the product is important, in fact investment might be dependent on doing exactly that.

The problem arises when the team is too small to be split so early. Splitting a team of 10 into four is obviously a bad idea. Hiring and bring new people in to manage these initiatives seems like the right approach. But with a product manger in place, we now have four PMs competing for design and engineering time to build their stuff. Those roles need to expand as well.

Dramatically increasing head count is the way forward. But starting four initiatives all at the same time and recruiting for all four is hard. Then the same leadership team has to set the vision for all four and manage four new teams. That is no mean feat.

Start the initiatives one at a time. Spread them out. If possible group initiatives into one team and when the time is right split them out (eg B2B and enterprise).

The most successful companies solve one problem and do it amazingly well. Find your product-market fit and then put all your energy into creating the best experience for your most important users

Ian Griffin. Seatfrog

I learned a lot working with Ian and the Seatfrog team. Tackle each initiative with relentless, single minded focus. That’s hard to do across four areas with a small team.

Jim Collin’s book Good to Great expands on this idea. Amazon UK / Amazon US

Scale-up Trap 2: Not dealing with the crappy jobs

I was coaching a PM a few years ago and she was under so much pressure. Not because she had too many products to manage but because she was also responsible for QAing the product, vailed as UAT by the dev team. The dev team were being pushed to hit delivery targets so quality was dropping. Bugs were everywhere.

It was time to hire some QA engineers, well an offshore agency to manager the QA. The QA engineer could find the bugs, write the Jira tickets, deal with customer bugs. The burden was lifted.

There are a ton of little jobs that it’s fine to scramble round and deal with when you are a startup but need professionals to manage when it’s time for you to start leading. To free up you and the team to do good work.

The COO should not be allocating annual paid time off. Hire QA, HR, book-keeping, PA for the exec leadership, all important jobs to free the team up for the really important jobs.

It always surprises me that incubators / offices never offer these services, they offer advice, but never offer to take these hassles off the team.

Scale-up Trap 3: The bad hire

Invoke the no asshole rule. A poor hire can drag on the rest of the team down and cost serious money: anything from $2k to $2mil not to mention the time it wastes.

The problem can escalate as bad hires will make other bad hires and can sink a business.

Scale-up Trap 4: Half-baked international expansions

We’ve launched into the Netherlands, Germany France, Spain and Italy with a team of three, go us! But we’re not getting any traction.

Overheard at a scale-up

Launching into a new territory is not easy. It’s not simply translating the app, hiring a native speaker to do the social media and hoping for the best.

Commitment to that locale is essential.

True internationalisation is not buying a .de domain. There needs to be an understanding of the needs of that country. A product tailored to that locale.

This is often when I get called in. Each country needs a dedicated team, a content writer, a marketer, a product manger, development resources, the list goes on. Doing international properly takes a dedicated team, resources and time.

Scale-up Trap 5: Leaders doing not leading

Early on in a start-ups life the CEO is the product. They are key in making the day to day decisions. It’s their baby. But when investment come it’s time for the CEO and the CTO to become a leadership team.

“It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do”

Steve Jobs

Having to run everything past the CEO, even minor things like the colour of a button disempowers the product team. Progress slows, innovation stops. CTOs can also fall into this trap, still reviewing code or worse coding when they should be leading.

Best case scenario the CEO becomes a bottle neck., worst case, the team are so disempowered they simply can’t make decisions anymore and the CEO feels like they “have to do everything.”

It’s time to hire senior people, product managers and tech leads. Let them solve the problems you identify and to execute the vision and strategy you set.

If you are struggling with these problems, get in touch, I can help.

I’m sure there are many other traps to avoid, let me know in the comments.

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I'm Joe Leech and I 10x leaders, the business and the products and services they create. I bring 15 years in tech, $20b in revenue, experience with 30+ startups & FTSE100 / Fortune100 giants. Together we can do great things. Work with me.

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