Challenges You’ll Face When Scaling Your Software Business

Startup ideas coming to life from a tablet

Success can be a double-edged sword for software businesses. At first, everything is full of promise for your startup. It has nowhere to go but up. Initial success fuels excitement, passion, energy. You feel rewarded for the work you put in.

But then the workload increases exponentially and the personal conflict within the company expands. You’ve reached the hard part — more complex issues and management battles. Suddenly, the level of experience and resources you need to handle it all becomes overwhelming.

Preparing for these challenges requires solid business planning and 360° insight into your business actions through business intelligence and ad hoc reporting. But you also have to know what challenges pose threats to your company, that show up as a result of your growing pains.

Here are the biggest challenges to watch out for when scaling your software business, according to those who have gone through it.

Growing Pains

Everything starts off simple when you’re small. One person can take on five different company roles. You don’t need HR or complex corporate communication policies when everyone in the organization can fit in one small room.

But as you grow, your company has to take on roles and departments it didn’t need at first. This can cause friction and huge logistical challenges.

“When I started working for PayPal, we had 35 developers. You could yell over desks and cubicles to communicate,” recalls industry veteran Mike Fisher. “When I left PayPal, we had 250 developers and the company was preparing to double that. We had to split the product apart, have engineers work on smaller modules in a more efficient way, and somehow still try to maintain a culture of open communication.”

Many startup leaders get especially anxious because these components make them look more like every other company. The challenge becomes how to mature as an organization without diluting the core vision, passion and values that brought everyone together in the first place.

Workflow Systems Can’t Keep Up With the Volume

Even mature organizations struggle as they increase in scale. “Each time your business doubles everything seems to break; your sales process, finance processes, management information flow, so every time your company doubles in size, you end up re-designing every process you have,” observes Erik Fairbairn, founder of the U.K. based electric car charging company POD Point.

He suggests anticipating which system will need to be reworked next and getting to it before the work volume tears it apart. But even then, keeping pace is challenging. “All your processes and procedures are under pressure all the time,” he acknowledges, “so it is hard to spot which one is about to fail next.”

With so much pressure on current systems, putting the task of improving them on your their team can be overwhelming and counterproductive for organizations. Adopting third party solutions to cover a company’s needs and can be an efficient route to take.

Adapting to New Environments is Key

It is vital that startups are able to differentiate themselves from larger companies and remain able to adapt to the market around them. Entrepreneur and mentor Mark Suster (@msuster) claims, “The best leaders adapt well to their environments, drive change and reject complacency….New data = new insights = better decisions = adaptation.”

Challenges can pop up as companies try to spread from coast-to-coast or internationally. The reality is that software companies must often rely on a partnership to spread their resources into these new territories. For instance, no one on your team will be able to speak every language your international customers do, therefore pushing your company to invest in international call center support. You will also need a way to handle support requests coming in 24 hours a day across multiple time zones. Addressing these challenges and making changes to support all of your customers is imperative.

Despite all these challenges, many startups still thrive. By relying on hard data and looking to the successes of others to guide your decisions, your startup can overcome hurdles to succeed in its vision and goals.

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