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Eric Siu explains why premature scaling kills startups. Focus on making your core service exceptional and hitting 80-85% retention before expanding. Validate new offerings with contractors before hiring full-time staff.
Eric Siu explains why premature scaling kills startups. Focus on making your core service exceptional and hitting 80-85% retention before expanding. Validate new offerings with contractors before hiring full-time staff.
You know what the number one cause of startup deaths are? What? Premature scaling. So it's, and I've made this mistake many times, I still think I might continue to make these mistakes, but it's thinking that you're better than you are already and not going deep enough in that core service to make it super excellent and make it super remarkable where you're getting a ton of word of mouth. So the best agencies, maybe 50% of their customers are coming through referrals, word of mouth. That's when you know you have something really good. And then your retention rates may be like, You know, 80%, 85% annually, right? Because there's going to be churn every now and then. Yes. If you're doing those 2 things and your net promoter score is very high with customers, okay, then you can maybe consider expanding. And clients will start to ask for stuff. Hey, what do you think about this? We need a lot of help with this over here. You start to hear that more and more, that becomes a signal. And then maybe you start to test that with other contractors to start. And if it does really well, then you can think about hiring full-time people.
