What Are The Five Traps You Need To Avoid As Your Startup Grows?

brett fox
5 min readNov 19, 2019

Your business is growing nicely. Revenue keeps going up month after month, quarter after quarter.

Soon, you’re going to need to new office space because of the all the people you think you need to hire. But, you’re worried deep down inside.

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You wonder, “What if the growth suddenly stops?”

Worse, you wonder, “What if we start losing business?”

I know some people will tell you, “Go for it! Take advantage of your opportunity and keep growing fast.”

I agree that you should go for it, but only to a point. You see, I don’t like taking unnecessary risks because taking unnecessary risks can get you killed.

So, how do you grow your company in a risk-averse way?

It’s tricky to figure out when to go full out or when you need to slow things down. But there are some warning signs that, if you’re aware of them, can keep you out of serious trouble.

Here’s what to watch out for in the growth phases of your company:

Phase 1: Pre growth to early growth.

Have you ever planted a garden? Pre growth to early growth is kind of like planting a garden.

You put your seeds in the ground. Feed them water and fertilizer, and you hope they’ll grow.

But you may need to change the mix of nutrients you feed your plants. That’s the early growth phase.

Here are some things to look out for:

A. The one customer syndrome.

Also known as the Portal Player syndrome.

Do you remember the company Portal Player? I sure do.

Portal Player IPO’d on the back of one very larger customer (Apple) that represented 90% of their business. And Portal Player died when that one very large customer (Apple) walked away from them.

It’s very rare that a company gains multiple large customers from the start at the same time. The question becomes should you scale your business on the basis of the one very large customer you have?

brett fox

I work with startup CEOs to help them grow their businesses . I built several businesses from $0 to >$100M. Learn more at https://www.brettjfox.com