Written by Jerred Ziegler.
Matt Scantland, co-founder of Ohio’s CoverMyMeds, knows a thing or two about scaling a startup. The company has doubled in business each year since it started in 2008, meaning twice the revenue, twice the employees and twice the number of patients annually. The company currently employs 250 people and is expected to do about $100 million in revenue this year.
This type of exceptional growth does not happen by accident. Scantland and co-founder Sam Rajan knew when they started the company that prior authorization was a big problem, but they didn’t know if CoverMyMeds’ service would work well enough to convince pharmacies, doctors, and insurance providers to adopt it. It wasn’t until one or two years into the business that Scantland knew they had created a company that people cared about.
“Our belief is that if you have a good product in a good market, it should be possible to grow rapidly and to a very large size mostly using the revenue that you generate from customers,” said Scantland.
He offers the following tips to entrepreneurs who have successfully created a new company, but now need to scale their business:
- Focus on product/market fit: Figure out where you fit in the market so that you can hire and train someone to keep the lights on while you continue to refine your space. Or, even better, work with a co-founder who can define your fit while you sell. A sole founder being indispensable to the sales process seems to be the number one cause of being “stuck” in companies that have some success but can’t get to the next level.
- Focus on your team: Once you can start hiring, look for amazing people. Not just good people that will do whatever you say. At the same time, keep in mind that these people are usually a good fit for a certain stage in the company. Early on, these folks are probably very good at a lot of things, but may not play as well with others as you need them to at a later stage. At that point, you’ll need to look for specialists who can get along with a larger organization.
- Create a valuable product for customers: The only way to sell profitably is to get help from your customers. Customers will help you grow if your product becomes more valuable to them as they use it. Think about how to design your product so that customers will benefit when their competitors use it, rather than wanting to keep it their little secret. Figure out how your product does a better job solving the key problem when everyone uses it.
- Don’t give up: “Overnight success” is a misnomer. In reality, it seems to take between five and seven years before the average consumer even hears about a new company.“It seems like nearly every challenge a startup faces is either due to lack of product market fit or not having the right people for the right stage of the company. Sometimes these problems look like something else and can lead you astray,” said Scantland. “Your job as a founder is to get the company into the right market with the right product and then get the right people on board to hit the gas pedal.”