Is Premature Scaling the Leading Cause of Startup Failure?

I came across an excellent writeup on TechCrunch which covers this very subject. It looks at The Startup Genome Report, an ongoing, collaborative R&D project designed by Blackbox which takes a comprehensive look into what makes Silicon Valley startups successful — and not.

 

Most interesting point in the article for me was this quote:

“Hiring any substantive number of sales or marketing people before there is customer adoption is premature scaling. All the early hires should be technical or product focused. At least one of the co-founders, though, should be obsessed with sales and marketing from the beginning. Adding one sales person after the product is in the market and one marketing person is fine, but these should be ‘doers’ not ‘VPs’”.

You can read the full article here.

I think premature scaling is certainly a leading contributor to startup failure, but there are many factors to consider. I do think that the most successful startups treat their cash reserves frugally, and keep their fledgling companies from overextending into any long term debt. Certainly, startups without commercial products will find it necessary to adequately plan and budget accordingly, but the marketing function isn’t something to write off at this stage. The marketing function is essential for early stage brand identity and brand building, and can often be accomplished in a cost effective manner through outsourcing. While a full time marketing manager might not be in the current operating budget, a part time solution could be utilized to perform essential marcom functions needed to nurture a developing brand.