Earlier this month I had lunch with an entrepreneur that described a situation I don’t hear about too often: after several very profitable years they wanted to transition from being profit-oriented to growth-oriented. The business was doing well and the market was continuing to mature around them creating a desire to gain more market share at the expense of near-term profitability. It seems pretty simple, right? Wrong.
Here are a few reasons why transitioning from profit-oriented to growth-oriented was more difficult than expected:
- Angel investors in the company had grown used to the nice dividends each year and didn’t want them to stop
- Internal team members were the operationally-focused type and not growth-focused (good people but not necessarily right for the change)
- Certain managers that excelled at their current size were viewed as not yet having the skills to take it to the next level, and would have to seriously improve or move on from the business
It was interesting to hear about these experiences first-hand as well as the challenges that come from making a dramatic strategic change.
What else? What are some other challenges with transitioning from profit-oriented to growth-oriented for a startup?
David Cummings on Startups 
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