The 'quickest way' to kill your business, according to a venture capital investor
"I think we've got a bit of an obsession with scaling that's sometimes unhealthy."
Most business leaders strive for growth but could your eagerness be your undoing?
A long-time VC investor has cautioned against being in a hurry to scale your company. Brian Caulfield said that an attempt to grow without a scalable business model is "the quickest way to kill" a business.
"The key thing for me is do you understand the connection between your sales and marketing spending and revenue and if you don’t, it’s too early to scale," he said on this week's episode of All In.
"The quickest way to kill a company is by investing in the sales and marketing when you really don’t know what works from a sales and marketing perspective so that’s the thing that I’m always looking for in a business.
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"Do you know that if we hire ten more sales people that we have the playbook that is going to enable them to deliver revenue as expected? If you don’t have that I’d caution against premature scaling."
Indeed not every company should be trying to scale at all, he continued.
"I think we've got a bit of an obsession with scaling that's sometimes unhealthy," Brian told host Yvonne Redmond.
"If you've got a business that generates a couple of million in revenue a year and you're making a half a million profit and you're giving ten people great jobs, then that's a fantastic business to own. If that's what your ambition for the business is you should be very proud of that business and you shouldn't feel compelled to scale just because the world is telling you that you should."
Brian features on this week's episode of All In, JOE's brand new business show.