Scale – Here’s Why You Need To Scale or Go Out of Business


You’ve worked hard to get your business where it is, and maybe you’re okay staying small.

But I encourage you to consider what your brand would look like if it did grow.

Maybe you could afford to hire more employees, taking a lot of the workload and stress off of your own back. Maybe you could offer more products or solutions to your customers. Maybe growing would help you establish yourself as a dominant leader in your industry.

Whatever goals you have for your business, growth is the fastest way to achieve them.

Why Scaling is a Solid Growth Strategy

Now, I’m not suggesting that tomorrow you go hire five sales reps and an assistant, sign a five-year office lease, or double your inventory. Instead, I recommend that you scale your growth over time.

Scaling means slowly and deliberately growing your brand. As it makes sense, ramp up your efforts and make smart investments.

Even if you don’t think you need to get bigger, consider that, depending on what industry you’re in, the “little guy down the street” that you’ve been competing with is getting gobbled up by large corporations, and now you have to work twice as hard to compete with the same “small business,” now that they’ve got serious marketing dollars behind them.

And if you’re on board with growing your business but unsure that scaling (slow and steady) is the best way to do it, consider how many businesses have fizzled out before they had a chance to fit their boots. They were buying $400 office chairs and promising orders 5x the size of what they could handle without having money in hand. Just look at any number of examples of the Oprah Effect gone wrong: tiny businesses like Greenberg Smoked Turkey who are simply not prepared for a flood of orders, technologically or inventory-wise.

If you want to be ready and waiting for the next big opportunity (and hey, I’m with you, hoping Oprah will call), you have to have a plan in place for that rapid growth.

Areas to Pay Attention to for Scaling Success

Just like you’d need a plan for any part of your business, scaling and growth requires its own strategy. You need to be able to answer questions like:

  • Can our website handle extreme loads of traffic?
  • How many products can we turn around in a day/week/month?
  • How fast can we train new employees to accommodate heavy orders?
  • What have we done wrong when order numbers have been high?
  • How can we train customer service to facilitate more calls coming in?
  • What sort of technology would we need to scale?

Having answers to these questions is the first part of your plan. If you will need to invest a large amount to get your company ready to grow, build a budget so that you spread those expenses out over time.

Start looking for technological solutions that will grow with you. If you’re using cloud storage and/or hosting (and you should be), make sure your company offers flexible pricing to let you get the power and speed you need should you get a flood of traffic to your site (after Oprah calls, right?).

Scaling successfully requires seeing the big picture and being patient in getting there. It’s your best way to grow your business over time without the growing pains.


Early-stage VC investors dominate CB Insights top 20

Rebecca Lynn, co-founder of Canvas Ventures, who is among CB Insights’s top 20 venture capitalists. Photo: Jason Henry/The New York TimesRebecca Lynn, co-founder of Canvas Ventures, who is among CB Insights’s top 20 venture capitalists. Photo: Jason Henry/The New York Times

For the last few years, the spotlight in start-up investing has largely shone on those who poured money into a company when it was already well along on a growth path. It turns out that spotlight may have been misdirected.

While some investors are throwing giant sums into more mature start-ups like Uber and Airbnb at soaring valuations, it is the venture capitalists who identify a promising company at its infancy and bet on its growth who often come out on top.

Known as early-stage investors, they dominate a list of the top 20 venture capitalists worldwide that was recently created by the research firm CB Insights. About three-quarters of the top 20 are investors who put money into start-ups during their early rounds of financing. Only a handful on the list are focused on investing at a later stage in a company’s life.

CB Insights generated the list using criteria such as how big a return an investor was able to produce when his or her investments went public or were acquired. CB Insights focused on the performance of investors since 2008 for the list.

The top 20 includes Peter Fenton of Benchmark, who invested in Twitter when the social media company had only 25 employees and was trying to fix its once-common service failures; the company went public in 2013. The list also includes Jim Goetz at Sequoia Capital, who was one of the few to invest in the messaging service WhatsApp before it was acquired by Facebook, and Jenny Lee of GGV Capital, who was among the earliest investors in 21Vianet, a Chinese data center services provider that has since gone public.

The idea that early-stage investors can generate much larger returns has long been a core principle of venture capital: Get in early and grab a bigger stake in a company, with more opportunity for a larger return later, the thinking goes.

Early-stage investments have accounted for the lion’s share of the venture industry’s gains since 1994, according to Cambridge Associates, a research firm that studied the quarterly financial reports of dozens of venture firms. Since the dot-com boom of the late 1990s, between two-thirds and three-quarters of the industry’s returns have been generated by early-stage investments in any given year.

But the value of investing in a company when it is still nascent has been somewhat obscured in recent years as hordes of non-traditional start-up investors—including mutual funds, hedge funds and sovereign wealth funds—have piled into private tech companies, often when those start-ups are already proven growth stories. When Uber raised around $2.1 billion in December, for example, one of its investors was Tiger Global Management, a New York investment firm with a hedge fund component.

Rebecca Lynn, a managing director and co-founder of Canvas Ventures who is on the CB Insights list, said early-stage investments generally pay off more because “investors can get more of an ownership stake and you’re also part of the team”.

Lynn, who invested early in the alternative lending platform Lending Club, which went public in 2014, added that “later-stage investing is more like a stock bet. You’re along for the ride”.

Yet there is more risk in early investing, since unproven start-ups can easily fail.

“There are so many unknowns, from what the core business is going to look like to what the team is going to look like,” said Danny Rimer, of Index Ventures. He is also on the top 20 list, partly because of an early bet on King Digital Entertainment, the maker of the game Candy Crush that went public before being acquired by Activision Blizzard. (Rimer also invests in firms in their later stages.)

Early-stage investing has changed in recent years. The top-returning venture-capital investments in any given year were once dominated by just a handful of brand-name, early-stage venture firms. That has shifted: During the last decade, new venture firms have contributed to an increasing share of the best investments, according to Cambridge Associates.

New players have been successful partly because they have been more willing to put money into companies outside Silicon Valley, especially in China, where start-up success stories have been abundant over the last decade, Cambridge Associates said in a report last fall.

That has benefited venture capitalists including Lee and Neil Shen of Sequoia Capital, who made names for themselves by investing early in Chinese start-ups that went public: Lee in the social network and Shen in the Internet security company Qihoo 360. Shen is also on CB Insights’ list of top 20 investors.

“The tech market has massively expanded, and tech is now far more accessible all around the world,” said Theresa Hajer, a managing director at Cambridge Associates.

As more venture firms have snagged pieces of the top deals, more have also taken pieces of the return pool, lowering the overall gains for the venture industry as a whole. Before the dot-com bust of the early 2000s, huge returns of 25 times the original investment amount were the norm for the top investments.

Since that period, it has been much rarer for the top investments in any given year to yield a 25-fold return, according to Cambridge Associates data.

For the foundations, endowments and pension funds that have poured billions into venture capital funds, finding the right early-stage investor remains a challenge. Scott C. Malpass, the chief investment officer at the University of Notre Dame, said he could count on two hands the number of venture investors who could successfully identify which young start-ups would make the transition to lasting companies.

“I just want to be in the top two to three companies, not the top 100, because that’s where the next Google or LinkedIn will be,” Malpass said about his philosophy of working with early-stage venture capitalists. “It’s still a home run game.”


Dominate Using These Digital Data Trends and Insights

 digital trends

Have you noticed how integral digital elements have become in our lives? Whether we love it or hate it, we are living in a digital economy, interacting with digital devices, building and managing digital relationships.

Here are 10 books that will give you insights on digital data trends and guide you through the digital landscape in 2016.

disrupting business book“Disrupting Digital Business: Create an Authentic Experience in the Peer-to-Peer Economy”

by R “Ray” Wang

More than half of the Fortune 500 have been merged, acquired, gone bankrupt and fallen off the list in the last 15 years because they didn’t adapt, transform or keep pace.  In “Disrupting Digital Business: Create an Authentic Experience in the Peer-to-Peer Economy,”  Wang claims it’s all about the right mindset and that includes being true to yourself and your brand mission, leveraging people-to-people networks, keeping brand promises, personalizing the customer experience, focusing on relevant content and developing a culture of digital DNA. The key to moving your organization forward lies in having a focus on transformation, staying relevant, being intentional and networked. Regardless how big or small your business is, you will find inspiration here.

platform marketer book“The Rise of the Platform Marketer: Performance Marketing with Google, Facebook, and Twitter, Plus the Latest High-Growth Digital Advertising Platforms”

by Craig Dempster and John Lee

These days marketing is more about digital creativity.  Collecting, managing and making sense of consumer data is the best way to deliver targeted personal experience that your customers have come to expect online. In “The Rise of the Platform Marketer: Performance Marketing with Google, Facebook, and Twitter, Plus the Latest High-Growth Digital Advertising Platforms” by Craig Dempster and John Lee (@JohnLeeMerkle), you’ll learn how to build competencies that will help you take advantage of the ever changing digital landscape. The book goes into detail about how to use digital tools like social media and digital marketing and how to develop strategies in this environment.

If you’ve been wondering how you’re going to accept, adapt and leverage tomorrow’s social platforms, this is a book that belongs on your shelf.

dot com secrets book“DotCom Secrets: The Underground Playbook for Growing Your Company Online”

by Russell Brunson

Russell Brunson (@RussellBrunson) isn’t just an author. He’s also the man behind the awesome marketing automation tool called “Click Funnels”. This tool has gained so much traction that he’s written “DotCom Secrets: The Underground Playbook for Growing Your Company Online” to help small businesses market online without worrying about the technical aspects of online marketing. Brunsen has taken everything that this tool does and written about it in exquisite detail so that you can do it too.  The good news is that you don’t have to be a Click Funnels customer to appreciate the strategies Brunsen covers here.

This is a wonderful book for any small business owner looking to sell products or services online and to make that experience educational, rewarding and profitable for their customer.

small data book“Small Data: The Tiny Clues That Uncover Huge Trends”

by Martin Lindstrom

By now you’ve probably heard of the phrase “Big Data.” This is the moniker we give to the onslaught of personal information that we share through our daily actions or social media sharing.  In “Small Data: The Tiny Clues That Uncover Huge Trends” by Martin Lindstrom (@MartinLindstrom), the author takes it to the other extreme.  He claims that Big Data doesn’t really give brands the kinds of insights they need to connect with their ideal customer.  Instead, Lindstrom goes to “Small Data,” triangulating highly personal data such as diaries, phone records and interviews.

This is a fascinating story of how our invisible and intimate behavior will have you predicting trends by simply observing social posts and seemingly insignificant actions.

twitter power book“Twitter Power 3.0: How to Dominate Your Market One Tweet at a Time”

by Joel Comm and Dave Taylor

Twitter has evolved from a social media fad to a phenomenon.  And if you’re still mystified, don’t worry. Pick up a copy of “Twitter Power 3.0: How to Dominate Your Market One Tweet at a Time” by Joel Comm (@JoelComm) and Dave Taylor (@DaveTaylor).  It’s a completely updated guide to Twitter in 2016.

You’ll get everything from setting up your account to “Twitter Etiquette” and how to connect and build relationships with experts, customers and everyone in between.  The book even gives you practical tips on how to set up your profiles and keep your account secure. You’ll love Comm’s practical advice that makes Twitter accessible and manageable even if you’ve never Tweeted before.

shareologoy book“Shareology: How Sharing is Powering the Human Economy”

by Bryan Kramer

From the first cave painting illustrating the latest hunting expedition to posting your vacation picture on Facebook and Tweeting your comments around this week’s episode of “Survivor,” it’s clear that people LOVE sharing. In “Shareology: How Sharing is Powering the Human Economy,”  author Bryan Kramer (@BryanKramer), a leading authority on social and digital media, takes a deep dive into the history and condition of sharing.  He didn’t write this book just for business or brands. He wrote it for people who want to understand and connect with others in a powerful way.  This book will show you how to listen on social media, see content as currency and develop personalized strategies that will help you grow and expand your marketing impact using social media.

smarter screen book“The Smarter Screen: Surprising Ways to Influence and Improve Online Behavior”

by Shlomo Benartzi (@ShlomoBenartzi) and Jonah Lehrer (@JonahLehrer)

If you read a book on an iPad, you’re less likely to remember its contents than if you read a hard copy! You overvalue products when you shop on a touch screen. Facts like this may seem trivial, but they make an enormous impact on how we process information and the decisions that we make.  In “The Smarter Screen: Surprising Ways to Influence and Improve Online Behavior” by Shlomo Benartzi (@ShlomoBenartzi) and Jonah Lehrer (@JonahLehrer), you’ll explore how to leverage the changes that technology makes to our brains in order to make better decisions. If you’re a gadget geek and interested in the backstory of intended and unintended consequences, you’ll enjoy this book.

storytellers secret book“The Storyteller’s Secret: From TED Speakers to Business Legends, Why Some Ideas Catch On and Others Don’t”

by Carmine Gallo

If you want to move, influence, persuade, touch and inspire people, then become a great storyteller.  In “The Storyteller’s Secret: From TED Speakers to Business Legends, Why Some Ideas Catch On and Others Don’t,” author Carmine Gallo (@CarmineGallo) shows you how to reframe ideas to make an irresistible, memorable and emotional connection with your audience.  The book goes into actual brain science to explain why human beings are attracted to stories and gives insights and examples how to create your own stories. He uses examples such as Richard Branson, Steve Jobs, Bill and Melinda Gates and more.  Here’s a sneak peek at one of the core principles  Great storytellers have had struggles in their lives and have learned to turn that adversity into victory. Ultimately, not every great storyteller is a hero, but they know how to talk like one.

quarter method book“The Quarter Method, Book 1: The Psychology of Sales (Volume 1)”

by Roy Wilhite

“The Quarter Method, Book 1: The Psychology of Sales (Volume 1)” by Roy Wilhite is the first of a 3-volume series that focuses on the psychology of sales.  The author is a psychologist and uses his experience in how people buy to demystify the sales process. Think of it as a sales system.  This volume starts before the actual sales process begins.  The author brings your attention to your mindset and focuses on recognizing and changing bad habits.  Other topics include getting into the mindset of the customer, wants versus needs and understanding perceived value from the customer’s point of view.  This volume is ideal for the new sales person or a salesperson who wants to take a fresh look at themselves or a new industry.

challenge customer book“The Challenger Customer: Selling to the Hidden Influencer Who Can Multiply Your Results”

by Brent Adamson and Matthew Dixon

Did you know that every purchase by a large company involves an average of 5.4 people? With that many cooks in the purchasing kitchen, it’s not surprising that they have conflicting priorities. In “The Challenger Customer: Selling to the Hidden Influencer Who Can Multiply Your Results” by Brent Adamson (@BrentAdamson) and Matthew Dixon (@Matthewxdixon), the authors show you how to focus on the low hanging fruit and that does NOT include the easy customers.  It’s actually found by focusing on the more challenging customers. The key is to reach all the decision makers and bring them to consensus.  Using in-depth research from CEB (Corporate Executive Board), the authors lay out a five-step process that will help you find those “Challenger Customers”, engage with them and leverage them to drive consensus.


Apple’s New San Francisco Office Could Be a Tool in Tech Talent Wars

Apple's New San Francisco Office Could Be a Tool in Tech Talent Wars

From Apple’s earliest days, executives insisted that employees work from its headquarters in sleepy suburban Cupertino.

The thinking, championed by Steve Jobs, was that a centralized campus would put the CEO “within walking distance of everyone,” said Steve Wozniak, who founded the company with Jobs.

That stance may finally be softening as Apple prepares to open chic new offices in San Francisco’s high-rent South of Market neighborhood, which has spawned scores of promising startups.

Apple’s decision to plant a flag in San Francisco, 46 traffic-choked miles north of its headquarters, comes years after similar moves from rival tech firms such as Google and LinkedIn and marks a turning point in Apple’s willingness to accommodate workers, according to recruiters and former employees.

The move is one sign of the intensifying war for tech talent – and of the overwhelming preference of younger tech workers to live and work in the city, with its vibrant nightlife and public transportation. The two floors Apple has leased in a building mostly occupied by CBS Interactive offer abundant open space and exposed ceilings, the preferred tech aesthetic.

As Apple’s Silicon Valley rivals dangled perks to woo workers in the latest tech boom, the iPhone maker mostly held firm – the company still does not offer free lunch, and it was among the last companies to operate shuttles to and from the city.

Those company-paid charter buses to the valley appeased workers for a time, but the novelty has faded, said recruiter Andy Price of executive search firm SPMB.

With rising competition for talent from a new wave of private companies with sky-high valuations – such as Uber and Airbnb – Apple must do more, recruiters and former employees say.

“Apple’s attitude has always been that you have the privilege of working for Apple, and if you don’t want to do it, there’s someone around the corner who does,” said Matt MacInnis, a former Apple employee who worked on the company’s education business and is now CEO of Inkling, an enterprise technology company.

Now, MacInnis said, “they have to compete.”

Apple spokesman Colin Johnson declined to comment.

Urban outpost
Apple’s footprint in San Francisco until now has come largely through acquisitions of companies already based there, including Beats Music and Topsy Labs, a social media analytics firm.

After Apple acquired Topsy in 2013, workers were surprised that the company did not move those employees to the valley, a former Apple employee said. Topsy’s space was large enough for about 75 workers, but other Apple employees soon began dropping in to work from the city, crowding the office.

The iPhone maker’s new office will be in about 76,000 square feet of rented space at 235 Second St.

Apple’s presence in San Francisco will remain modest, especially compared to rival Silicon Valley firms such as Google and LinkedIn. The new office is big enough for about 500 workers.

Apple has said that it had more than 25,000 employees in the Santa Clara Valley, where it is headquartered.

Apple could opt to move some employees already in San Francisco into the new space, such as those from Topsy or Beats. The company has advertised for a variety of jobs in the city for workers in machine learning and big data – two of Topsy’s specialties – and digital music, Beats’ domain.

The space is currently under construction, suggesting Apple might be ready to move in late summer, real estate experts say.

Demand for desks there could be intense. After established tech firms open up shop in San Francisco, they often have more workers wanting space there than they can accommodate, said broker John Lewerenz of real estate firm Cushman & Wakefield.

Google has struggled to keep workers from swarming its San Francisco office, particularly on Fridays. The company quickly leases additional floors in its main San Francisco building when they are vacated by other tenants, Lewerenz said.

Commuting and recruiting
Apple’s new San Francisco office appears to be “just a small adaptation” to some tech workers’ disdain for the commute of at least 90 minutes to the South Bay, said former company executive Jean-Louis Gassee.

But some former employees say an official Apple office of any size in San Francisco was once unthinkable – even though the city is home to 14 percent of its workforce, second only to San Jose, according to a 2013 company report.

Apple’s stance on centralization turns off some job seekers, said recruiter Amish Shah, founder of Millennium Search, who has run across some candidates who rule out the company because of the commute. Younger tech workers, he said, put a high premium on quality of life.

San Francisco residents now have more options to dodge the commute with a growing number of tech companies in the city, recruiters say.

“If companies want to stay competitive and have a shot at hiring the best available talent, they’re going to have to be flexible,” said Jose Benitez Cong, a former Apple recruiter who is now launching a startup.

Before leaving Apple in 2009, MacInnis spent three hours a day commuting from San Francisco to Apple headquarters. Now he uses Inkling’s location in the city to his advantage, systematically recruiting San Francisco residents tired of long commutes to the valley.

Russ Heddleston, co-founder and CEO of document sharing company DocSend, says he has also found an edge by planting his startup in San Francisco. He previously commuted to the valley to work for Facebook, a notable exception to the trend toward satellite offices in San Francisco.

“They have the social clout to get people to commute,” he said. “But if they weren’t as cool, could they afford to have their office in San Jose and get talent to come in? It’s a real problem.”

Suburban sprawl
Another factor may be that the company has little room left to grow in Cupertino: It occupies about 70 percent of the office space in the city of about 60,000, said Angela Tsui, the city’s economic development manager.

The sheer size of Apple’s work force has prompted the company to grab space in neighboring towns such as Sunnyvale and North San Jose.

The diffuse office structure has dimmed the allure of commuting to the South Bay, said one former employee, who requested anonymity to protect professional relationships.

“The old appeal was if you were an engineer at the mother ship, you could go to the cafeteria, and there’s Steve Jobs ordering sushi,” he said. “Those days are gone now.”

In Wozniak’s view, spreading out the teams could infuse new creativity into the company. In a recent interview, he recalled being a lonely voice of dissent on the company’s philosophy of centralization.

“I was the executive who always opposed that,” he said. “I felt that you should distribute your divisions… and let the teams think more independently.”