At the time you notice that your startup has a steady flow of revenue, the existing processes in your company start feeling small, and you understand that your users expect more from you, probably it’s time to scale.
Deciding to scale a startup is an exciting, yet challenging process that can add a couple of gray hairs to your head because if you want to expand to new horizons, you have to take risks.
As a team of product designers, we believe that having a reliable product team, as well as a carefully thought out approach to the product design helps to eliminate the scaling risks and make your business a few steps closer to success.
And though there are a lot of articles on the internet that provide general tips about scaling your startup, here we want to focus on two challenges from the product design perspective:
- Growing your team
- Expanding your product
But first of all, let’s make sure that we mean the same thing when saying the word “scaling”.
The difference between growth and scaling
We know that growth is the second of four product life cycle stages, but very often we hear the word “scale” in the same context. Though these two terms are often used interchangeably, there is a slight difference between scaling and growing that is important to discuss in terms of our topic.
So, what does it mean to scale your business, and what does it mean to grow your business?
Let’s start with “growth”.
When growing a business we are generating more income. But in order to generate that additional growth, we have to add new resources (purchase additional materials, get a new office, hire more employees, serve more clients, and so forth). And all those things incur a bunch of other expenses. For example, you’ve generated an additional hundred thousand dollars in revenue, but it cost you eighty thousand dollars. It means you made twenty thousand dollars, which is still great.
Now let’s move to “scaling”.
When you scale a business, you generate additional revenue without entailing that same degree of expenses. Spendings rise incrementally or stay at the same level. For example, you managed to increase the amount of income by four times, without hiring a single employee. Instead, you automated some processes and spent little money on them. That is, scaling means growing exponentially.
Below is a graph that will help you better understand the difference between growing and scaling.
Now some important facts to mention about scaling:
- Scaling is not better than growing, and vice versa. The choice depends on the specific needs of your company, team, and customers.
- Scaling is not completely feasible for all businesses. It’s not something that all kinds of startups should opt for to become successful. However, it works well for the tech industry.
In this article, we focus on scaling as a faster and budget-friendlier way to develop your business.
The last point we want to mention before moving further is that before scaling your business you as a tech startup owner should make sure that
- You achieved your product-market fit, that is, your product has its audience who needs it.
- You have a stable flow of revenue which proves you’ve found the product-market fit and helps attract investors to fund your growth.
In the next sections, we will discover what startup scaling challenges wait for business owners and learn how to cope with them.
What you can do to scale your business from the product design perspective
Unfortunately, among all the roles in SaaS companies people often underestimate the role of product design in their projects’ success. They would rather hire an additional engineer and then take care of finding a strong designer. Therefore, to begin with, let’s state why it is worth considering product design when scaling.
In 2018, McKinsey conducted research aimed to identify the value of design for businesses. Based on the research, they created the McKinsey Design Index (MDI) that orders the companies according to how strong they are at design and shows the correlation of this fact with companies’ financial state.
McKinsey found out that businesses with top-quartile MDI scores outperformed the percentage of annual growth rate by as much as two to one (see the graph below).
To be more specific, here is one fact from Airbnb’s scaling story. Airbnb’s founders understood that they had the same target audience as Craigslist. That’s why each time people offered their house for bed and breakfast on Craigslist, Airbnb’s team would email them and ask if they wanted to make a post on their platform.
That’s how they reached a new audience, but the next question is: How did they manage to retain them? Here comes the power of design. Once a visitor discovered Airbnb, they were impressed by visually appealing property images and the great user experience that the platform provided.
Therefore, sending emails to Craigslist’s users and showing them the real value of Airbnb with the help of great product design led to the rapid growth of this vacation rental platform loved by people all over the world.
Good design is essential for product adoption and retention rates. It makes the product useful, understandable, aesthetically pleasing, and innovative. Therefore, when thinking out your business scaling strategy don’t forget to take care of expanding your product design team.
Growing the design team
Product designers’ duties involve having a deep understanding of the users and the value your product provides to them. As well, product designers should be aware of the company’s business goals and make all the design decisions taking into account the product's business strategy. Thus, a scaling stage startup needs product designers not to make the product "beautiful", but to ensure that the new features/offering you plan to deliver evolve your business and bring value to the customers.
A bigger design team allows you to come up with ideas faster, and most importantly, validate them quicker and more effectively. In its turn, idea validation lets you assess users’ and market’s needs, ensure you don’t implement innovations based on unverified assumptions, and therefore, prevent your scaling startup from going onto the wrong path.
Though, understanding the need to grow the team doesn’t make this process easy. Below are three main challenges that you as a product owner may face when expanding the design team:
Organizing and optimizing work processes
A 50-person team won't survive the processes of a 5-person team. When you start with one designer who performs a vast variety of duties, there’s no need to build a clear structure around the design process. Once your team starts growing you’ll have to think out how the product design department should collaborate and function to keep consistency.
That is, you have to come up with a set of standard algorithms for how your team conducts research, ideate, validate, test, communicate, exchange ideas, and so on. Such an algorithm includes defining the tools they should use, the documentation they have to fill in, the principles they have to follow, and more.
On the other hand, scaling is not only about getting more of everything: people, products, revenue, processes. It’s also important to find things that slow you down and optimize them.
Some processes that used to work well in the past can become redundant for your scaling business, like the process of getting approval, or communication overload. For example, the former CEO of General Motors, Ed Whitacre, decided to cut down the number of paperwork workers had to deal with. By eliminating the number of reports employees had to fill in, they got more time to think of innovations and come up with new ideas. This way, Ed Whitacre managed to help the company scale more effectively.
With the defined tools and processes in place, you can start growing the team and its structure.
When you enter the growth stage and your scope of work increases intensively, you may feel a great need to hire just any product designer you can find. However, hiring the wrong employees is one of the reasons why startups fail.
Here's what Diane Greene, the founder and the former CEO of VMware, says about hiring at scale: “It’s a good thing to remember that hiring will get easier as you scale — but you should also never drop your standards.”
It’s always more important to take care of the quality of the employees than their quantity. Hire those UI/UX designers who understand your product vision and have some experience in the field you work in so that they can facilitate the company’s growth. Besides, choosing a product designer who understands your product’s mission will help you maintain the company culture at scale.
One more difficulty that you may face here is the fact that the average time to fill a position is 42 days and time is your most precious resource. The solution to the faster quality hiring process may be to outsource design work.
Hiring external professionals will help you quickly find additional pair of hands to help you cope with a greater workload, and take on several ongoing projects. Additionally, outsourcing can give you a fresh look at your business, reduce costs, and, of course, save time.
For example, you may expand your team with Eleken. All our designers are product designers with expertise in creating SaaS applications. We work as in-house employees, but remotely, focusing on one project at a time. Therefore, when we design new functionality, we dive deep into the essence of your existing product with its business logic, design systems, and UI patterns to make sure we help you grow your business effectively.
Structuring the team
As Larry Page, the co-founder of Google, recalls, at the time the company stepped into its hyper-growth stage at the beginning of the 2000s and reached about 400 employees, Mr. Page began to miss the good old days without the bureaucracy and all those managers running around. Therefore, he decided to get rid of all of them. The result was that about 100 developers now had to report to one executive. Of course, it wasn’t a change for good.
The moral of this story is that business at scale does need some hierarchy and new roles in the company. The thing is to structure the team correctly.
It is impossible to find a perfect candidate for each position, therefore our advice would be to look for designers that are experts in one area, but also have good general knowledge in other fields to take another role if needed. This is called a T-shaped designer.
This way, when your team scales, you won’t have a knowledge gap because of the overlap between your employees’ skills.
The number of designers
The situation differs from company to company, but here's what Jesse James Garrett, the UX designer and the co-founder of Adaptive Path strategy and design consulting firm suggests on his Twitter account:
Still, there's a myth going on that the number of designers usually affects the project’s length. The quality of the outcome depends on the designer’s skill set, not the quantity. So, if you have enough time, you may opt for hiring fewer design specialists for your project.
According to Jason Culbertson's webinar Scaling UX in Organizations, the way businesses organize their design team depends greatly on the number of employees they have.
- Up to 10 designers: roles often overlap between team members: one designer can be responsible for the user interface, user experience, and UX research. Team members may work on different product features/products all at the same time.
- Up to 25 designers: designers are distributed into product teams, each team member has their specialization, and a couple of designers start working on the design system part-time.
- Up to 50 designers: the team that builds and evolves the design system grows from 1-2 to 3-4 designers and starts working full-time.
- Up to 100 designers: separate teams are responsible for everyday product design tasks, owning the design system, and so on.
Expanding the product
When your startup scales, the team, the number of code lines, and features scale with it. As the result, it becomes difficult to control that every new employee adheres to the company’s design standards and principles to keep your product/s consistent and user-friendly. Additionally, if your designers work in distributed teams they may start performing repetitive tasks, like creating a new version of button design and the like, which is not only a waste of time and resources but also the worsening of user experience.
This mess in the design process negatively affects the product’s performance. Therefore, once your product team grows beyond 15 designers and the company has more than 500 workers, it’s definitely high time to build a UX design system.
UX design system is a collection of standards to manage scaling business design. It ties together all components of your product like colors, typefaces, and illustrations in a structured and unified way. It also helps to fix inconsistencies and build a unified visual language to help you create a scalable product.
For example, once the Eleken team had to work with TextMagic, a customer experience platform that evolved its product vision and decided to expand the number of products they had. Luckily, they already had a well-developed design system, and though we had a lot of work to do, putting Textmagic’s design system in practice allowed us to stay productive, quicker cope with the workload, and keep consistency across the whole product set.
To sum up
Investing in product design can help your company stand out in the market and favorably influence the overall business growth. To be able to cope with all the challenges that a scaling phase brings it’s important to have a reliable team with you.
So, how about hiring a senior product designer at Eleken? Share the details of your project, and we will provide you with the best expert for the job.