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  • Lidiya Becker

Slowing down to speed up - scaling the right way

Yes, start-up operations are all about speed. However, building in a way to slow down is equally important for the long-term viability of your business. Would you feel confident flooring it on the highway when your braking system may not work? Unless you’re a serious adrenaline junkie, I doubt it. You need to be able to stop when there's a piece of junk in the road, slow down rounding a curve, or decelerate once you’ve spotted highway patrol lurking along the sidelines.

Applied to a start-up, what does this mean? How do you both grow quickly and create the systems that enable you to slow down when necessary? Below are 3 practical approaches that I have found to be effective.

1. Metrics - Whether they are KPIs, OKRs, or just numbers you track on a spreadsheet, these magical numbers are “windows into your business”. Pick these numbers wisely - think Goldilocks’ rule - not too many, but not too few. Ask yourself the following questions:

  • What metrics tell you that your business is running well?

  • What metrics indicate an elevated risk to the business?

Think of your car dashboard - you’re always looking at the basics - say speed and gas level. But every so often, you’re alerted to other items that put your car at risk - tire pressure, low battery, engine warnings, oil change reminders, and so on. Your car dashboard is essentially the “system” that puts your mind at ease - confident that you’ll receive an alert prior to a catastrophic issue. Your business metrics serve a similar purpose. The metrics you define and track regularly confirm you are on the right path and alert you to any hazards that may lie ahead.

2. Five Why technique - The Five Why technique originates from the Toyota Production System and is frequently used in the context of quality control, manufacturing, and engineering. It encourages getting to the root cause of issues by asking “why?” five times. Here’s how it might work in practice at a start-up:

  • Why did we miss our sales targets this quarter? The paid advertising channel did not perform to expectations.

  • Why did the paid advertising channel not perform? The price of ads went above our budget.

  • Why is the price of ads beyond your budget? Our budget doesn’t account for the volatility of ad pricing.

  • Why doesn’t our budget account for volatility? Because we don’t have a way to plan for this.

  • Why don’t we plan for this? Because we don’t have time or resources.

What begins as a problem of missed sales targets, ends as something entirely different - a lack of planning for paid advertising volatility. Now that the root cause of the problem is clear, leadership can decide whether it’s worth investing in a solution - in this case, adding time and resources to better model and predict the costs and efficacies of paid marketing channels. This does not guarantee sales targets won’t be missed again, but with investment and resolution to the root cause of an issue, it is unlikely they’ll be missed again for the same reason. As the organization continues to diligently pursue the root cause of problems, outcomes consistently improve and the organization flourishes, one incremental step at a time.

3. Transparency and ownership - Reporting on the right business metrics is important, but not enough. Metrics should be actionable. This means they must be transparent to the right group of individuals (in some cases, this may include the entire company). Furthermore, clear ownership of specific metrics is important. In other words, when the check engine light goes on - the light both needs to be visible to the right people and accountability of action must be clear. Who takes action to address the engine? In a start-up, while wearing many hats is the norm, it pays to be extremely clear about who in the organization is accountable for each metric.

To sum up - reporting on relevant metrics, embracing the “Five Why” technique in order to get to the root cause of issues, and creating an environment with transparency and clear ownership - will act as natural speed regulators for hyper-growth start-ups. The idea is to empower the business to confidently accelerate, knowing there are strong systems in place should there ever be a need to slow down.

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