Federico CentraCEO and co-founder of SpaceDev, a consulting and development services company with a focus on blockchain and web3.
Congratulations—you’ve funded a company! The experience lived up to the hype and now you’re excited for the future. At least on paper, if you work hard and your service fills a niche, you should be fine as an entrepreneur. Easiest thing in the world, right?
So why this? almost 90% of startups failwith about 10% closing in the first year and about half closing their doors within five?
When I funded SpaceDev seven years ago, I didn’t exactly think the journey ahead would be a walk in the park, but I never suspected how much I would have to learn and adapt. Business, let alone life, presents endless twists and turns that exceed expectations. Not only do you need to keep the ship upright and control the negatives, you also need to know how to use the sails when the winds are in your favor.
Books like Escalation by Verne Harnish helped me overcome typical growth barriers. There is no shortage of useful guides, so their origin is not so important as long as they are carefully studied and applied. What follows is a homebrew of tips and insights for sustainable expansion, with a roadmap for assessing and boosting a company’s health.
Main obstacles to development
When it comes to biological health, it’s best to avoid getting sick in the first place by taking care of yourself every day. This is true for businesses too—as companies grow and complexity increases, maintaining a strong foundation becomes key. Typically, the main areas to look out for are:
1. Leadership: Growth often reveals weaknesses at the top, especially when it comes to delegation and strategic foresight. Without strong evidence at all levels, companies cannot maintain alignment and drive momentum.
2. Scalable Infrastructure: Expanding teams, customer bases and services require strong communication and decision-making systems. Their absence will lead to process congestion and lack of coordination.
3. Marketing: Attracting and retaining customers, talent and key partnerships is difficult. Many companies overlook the need to scale their marketing efforts, limiting their reach and competitive potential.
Breaking Through
Getting a company out of a growth hurdle requires vigilance and a plan of action. Each situation will have its own specific diagnosis and solution, but for the sake of this guideline we can focus on four pillars. Each comes with practical tools that enable deeper evaluation and continuous improvement.
1. Leadership
It all comes down to having a strong, cohesive culture and core values that, when clearly communicated, influence and guide all levels of decision-making. Regularly reviewing these values helps teams stay aligned with the company’s mission.
Organizations can also conduct employee engagement surveys and value assessments to measure cultural fit. These are particularly useful for identifying areas of discrepancy within groups. Almost 23% of startups fail due to team-related issues, highlighting the importance of internal alignment.
2. Strategy
A deep understanding of the market and a unique value proposition is essential. Tools like a SWOT analysis and Porter’s Five Forces helps identify the company’s position relative to competitors and what unique offerings attract customers.
• SWOT analysis enables companies to identify their strengths, weaknesses, opportunities and threats, enabling better strategic planning.
• Porter’s Five Forces provide insight into the competitive landscape, helping businesses adapt their strategies to industry changes.
Understanding customer needs can make the difference between success and failure. indeed, CB Insights found that lack of market demand is the reason behind 42% of startup deaths.
3. Execution
Having the best plan or strategy won’t matter unless you implement it in a way that is fair. To ensure this, leaders should set clear priorities, consistently collect relevant data, and establish a meeting pace that promotes alignment.
• KPIs (key performance indicators) track and help visualize metrics in real time so leaders can make adjustments as needed and focus on priorities.
• OKRs (objectives and key results) are tools that keep goals achievable and aligned with long-term goals, promoting accountability among teams.
• A Rockefeller Habits Checklist provides a structured approach to execution, ensuring that each priority is addressed methodically and consistently.
As one examplesoftware company Atlassian was an early adopter of OKRs, contributing to its impressive growth and ability to adapt to market changes.
4. Cash management
This is the soul of a business—82% cite cash flow issues as a key factor in their closure. Every decision should be taken with special care:
• Cash flow statements, which give a comprehensive picture of inflows and outflows, highlighting financial strengths and potential risks.
• The cash conversion cycle (CCC), a measure of how quickly a company can convert resources into cash, is critical to optimizing operations and improving liquidity.
• Financial forecasting software, useful for projecting cash flow needs, identifying potential shortfalls and planning for long-term stability.
The clothing startup Outdoor Voices used financial forecasting to plan growth more efficiently, avoiding cash flow disruptions common in the early stages of expansion.
Holistic Business Health
Beyond the aforementioned four pillars, companies can rely on many other tools to manage their health.
• Personal one page design: Harnish’s OPPP helps founders align their personal goals with business goals in a variety of areas.
• Complexity estimation: As companies scale, their structures become more complex. Tools such as organizational network analysis or communication mapping can reveal structural bottlenecks, allowing entrepreneurs to streamline processes.
• Employee Job Surveys: High employee engagement has been connected for improved productivity and reduced turnover. Regularly measuring morale helps identify potential problems early, keeping employees motivated and in sync with goals.
Building resilience
Long-term success requires careful monitoring of your company’s health—the stronger its foundation, the higher its survival rate. As a founder and business consultant, I believe the best way to achieve this is to use the right tools to accommodate growth, mitigate risks and build resilience early on.
However, you should not forget to revisit them regularly, which is the basis for adapting to changes and achieving sustainable growth.
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