How to go from startup to scaleup

Most startups don’t scale. Maybe you’ve seen others crash and burn. Or maybe you’re feeling the cracks forming in your own business.

The processes that worked when you had a handful of customers are breaking under the weight of growth. Things that once felt effortless now take twice as long.

And then there’s you. At first, you did everything – sales, product, marketing, hiring. Now, you can’t keep up. You need a team that runs the business, not a business that runs you into the ground.

But it’s hard knowing when to shift. And then, when you do, how to do it right.

This guide lays out what you need to do to go from startup to scaleup, and how to stop your company from collapsing under its own weight in the process.

Why startups should scale

Growing a business means getting more customers and revenue, but scaling means doing it in a way that gets easier over time.

The right kind of scaling helps a business build momentum, become more resilient, and unlock new opportunities that weren’t possible before.

Here’s why it matters:

• 1. Reaching new customers – Scaling helps startups expand into new markets, bringing in more customers and income.
• 2. Building a strong reputation – A growing business can become an industry leader, making it easier to attract customers and opportunities.
• 3. Better deals with suppliers – A well-known brand has more power to negotiate better terms with suppliers, partners, and investors.
• 4. Hiring great people – A bigger, more structured business can attract and keep the best employees, which helps it grow even more.

In short, scaling is what separates small businesses from those that make a big impact.

1. Are you ready to scale?

As a founder, you do everything. You talk to customers, write code, handle marketing, answer support emails. But scaling changes this.

Instead of doing it all yourself, you have to build a machine that does it for you. That shift is what separates a scaleup from just a bigger startup. So how do you know when you're ready? Here are the key signs.

1.1. You have product-market fit

Before scaling, your product needs to be something people genuinely want and keep coming back for.

If you're constantly convincing people to use it, you're not there yet. A weak product only amplifies problems as you grow, making scaling a recipe for disaster rather than success.

1.2. You have a repeatable way to get customers

Having product-market fit isn’t enough. You also need a scalable, repeatable way to acquire customers.

Early on, founders can rely on personal introductions and manual onboarding, but these methods don’t scale. A simple way to test this is to measure whether every dollar spent on acquiring customers reliably brings in more than a dollar in return.

If acquiring a customer costs $100 but only brings in $50, the model isn’t scalable. If $100 brings in $500, growth becomes self-sustaining.

1.3. Your revenue model is sustainable

A mistake many startups make is trying to scale without a business model that actually works.

If the cost of making and selling your product is the same as or more than what you earn, your business isn’t truly growing. A company that grows from $1 million to $10 million in revenue but loses money at every step isn’t scaling, it’s sinking.

1.4. Your operations can handle growth

Things may run smoothly at a small scale, but as demand increases, cracks begin to show.

Support teams get overwhelmed, the codebase struggles with increased traffic, and processes that worked for a five-person team fall apart with five hundred.

A simple test is to ask whether your startup could handle twice as many customers overnight. If the answer is no, fix the systems before trying to scale.

1.5. Your team is ready to scale

Startups often rely on small, flexible teams where everyone wears multiple hats, but scaling requires structure.

Founders who try to stay involved in every decision become bottlenecks, slowing everything down. A business can’t grow if the founder is micromanaging every detail.

Great founders shift their focus from execution to building a team that can execute.

1.6. You have enough cash to scale

Even if a startup is profitable, scaling requires investment in hiring, infrastructure, and marketing.

Some companies scale through bootstrapped organic growth, while others raise funding to accelerate the process. Either approach can work, but if a business relies on outside investment, its metrics need to be strong enough to attract continued funding.

Running out of cash mid-scale can force your company to either slow down or raise money on bad terms. Neither are ideal.

2. Business model and operations

One of the biggest reasons startups fail to scale is that their business model doesn’t work at a larger size.

At a small scale, a broken model isn’t always obvious. Founders can compensate with sheer effort – handling things manually, making exceptions, and pushing through inefficiencies.

But when a business grows, everything breaks. If revenue doesn’t grow faster than costs, or if every new customer requires more staff to support them, the model isn’t scalable.

So before you scale, you need to make sure your business model is ready.

2.1 Refine your product-market fit

Even if your startup has found early product-market fit, scaling forces that to be tested on a much larger level.

Many startups start strong with a niche audience, but when they try to grow, they struggle to attract new customers.

A product that works for early adopters might not appeal to mainstream users, or it may be valuable, but not valuable enough for a larger audience to pay for it.

One of the best ways to test whether your product is ready to scale is to look at customer retention. If customers keep using the product over time, that’s a good sign. If they churn quickly, you need to figure out why.

• Are customers using the product the way you expected?
• Are they getting real, measurable value from it?
• Do they stick around, or do they leave after a few months?

If you can’t confidently answer these questions, refine your product before you push ahead with scaling.

2.2 Develop a repeatable revenue model

The best startups figure out a revenue model that works at scale before they try to grow.

Some startups struggle because their early revenue comes from one-off deals or project work. If every customer requires custom pricing, negotiation, and onboarding, you don’t have a scalable business. You have a consulting business.

A scalable revenue model is predictable. You should be able to estimate how much revenue you’ll make next month based on what’s happening today. The best models also tend to be subscription-based (SaaS, memberships) or transactional models with high frequency (marketplaces, payments).

Ideally, revenue doesn’t just come from constant new sales, it grows as existing customers spend more over time. To check if your revenue model is scalable:

• Can we predict how much revenue we’ll make next month?
• Do we have to find new customers constantly, or does revenue grow from existing ones?
• Does revenue grow faster than costs as we scale?

If you’re not sure, your model probably needs work before scaling.

2.3 Create a pricing model that scales

Many startups underprice their product, assuming that lower prices will help them grow faster. While that can work, more often than not you’re leaving money on the table.

When you scale, pricing matters more than ever. If prices are too low, every new customer costs the company money instead of making money. Worse, you may attract the wrong type of customer – those who churn quickly or require too much support.

A scalable pricing model should grow as customers grow. For example, rather than a flat rate, pricing should be based on usage, number of seats, or feature tiers. This way, your biggest customers pay the most, and your revenue scales with them. A good test for pricing:

• If 10% of your customers aren’t complaining that it’s too expensive, you’re probably too cheap.
• If 10% aren’t paying for premium features, you might be leaving revenue that could be up for grabs.

The best way to figure out pricing is to test it. Raise prices and see what happens. Most startups are surprised to find that higher prices don’t hurt growth as much as they feared.

2.4 Automate systems for growth

For your business to scale, your systems need to be scalable.

If every new customer requires manual onboarding, that’s a problem. If every sale needs a personal pitch from the founder, that’s a problem.

Scalable businesses grow without adding proportional costs, which means automating as much as possible. Here’s some of the things to consider automating:

• Customer onboarding: Can customers sign up and start using your product without talking to a human?
• Marketing & sales: Can new customers find you and convert without a manual sales process?
• Support: Do you have self-serve options like FAQs, chatbots, or community support?

The less effort needed to grow, the faster and more efficiently you can scale.

2.5 Build a moat

The bigger you get, the more competition you attract. If you don’t have something that makes your business hard to copy, you’ll struggle to stay ahead. This is your moat – like what you’d see around an old castle.

Moats can come from different places:

• Technology: Proprietary algorithms, AI models, or hard-to-replicate software.
• Network effects: The more people use it, the more valuable it becomes (e.g. social networks, marketplaces).
• Brand: A strong reputation that makes customers trust you over competitors.
• Data: Proprietary customer insights or industry data that others can’t access.

Before scaling, ask: What makes it hard for someone else to do what we’re doing? If you don’t have a good answer, you might not be ready to scale yet.

2.6 Test your model works under pressure

Before you scale, you need to make sure your business model holds up under pressure.

A good way to test this is to simulate rapid growth. If you doubled your customer base overnight, what would break? Would support collapse? Would infrastructure struggle? Would cash flow become a problem?

Smart companies scale in controlled steps. They don’t just assume that what worked at 100 customers will work at 10,000. They test, adjust, and keep the system running smoothly.

3. Customer Acquisition

The best startups figure out how to get it in front of more people. Growth is what separates a successful product from a successful company.

To go from startup to scaleup, you need a system that brings in customers predictably, without you having to chase every single one. This means building a repeatable, scalable growth engine.

3.1 Find your scalable growth channels

Every great company finds one or two channels that drive most of its growth.

Startups often spread themselves too thin, trying 10 different marketing tactics without focusing on the one that really works. But the best companies find a primary channel and double down on it.

Some of the most common scalable growth channels:

• 1. SEO & content marketing – Works for companies that can generate organic demand through search traffic. Example brands: HubSpot, Zapier, NerdWallet.
• 2. Paid advertising – Works if customer acquisition cost (CAC) is lower than customer lifetime value (LTV). Example brands: DTC brands, subscription services.
• 3. Viral & referral loops – Works when users naturally invite others. Example brands: Dropbox, Slack, TikTok.
• 4. Sales & Partnerships – Works in B2B and enterprise where deals require relationship-building. Example brands: Salesforce, AWS.
• 5. Community & Word of Mouth – Works when customers love the product so much they talk about it. Example brands: Notion, AirBnB Figma.

The key is to test channels until you find one that’s both repeatable and scalable. If a channel works at a small scale but doesn’t scale efficiently, it’s not the right one.

3.2 Build a scalable sales process

Even if you have a strong marketing engine, many businesses still need a sales team to close deals, especially in B2B.

At the startup stage, founders are often the best salespeople. They know the product inside-out and can sell the vision better than anyone. But as you scale, you need a sales process that works without the founders.

A scalable sales process has:

• Clear stages – From first contact to closing the deal.
• Defined roles – Sales Development Representatives to qualify leads, Account Executives to close, customer success to retain.
• A playbook – A repeatable process so new sales hires don’t start from scratch.

The goal is to make sales less dependent on individual people and more of a machine that runs on its own.

3.3 Expand beyond your first customers

Most startups find product-market fit with a small, focused audience. But to scale, you usually need to expand beyond that first niche.

This doesn’t mean going after everyone. It means carefully identifying adjacent customer segments who will also find value in your product.

A smart expansion strategy:

• 1. Start with your core audience. Who loves your product today?
• 2. Find adjacent markets. Are there similar customers with the same problem?
• 3. Test before committing. Small-scale campaigns, surveys, and beta users before fully expanding.

Companies that scale successfully don’t abandon their core users. They build on them.

3.4 Keep your customers longer

A lot of startups think growth means getting more new customers. But one of the best ways to grow is to keep the ones you already have.

Retention is what makes growth sustainable. If every new customer churns, your business is like a bucket with a hole in it. No matter how much you pour in, it never fills up.

To improve retention:

• Make onboarding seamless. The faster new users get value, the more likely they are to stay.
• Engage users early. Frequent touchpoints, emails, and in-app nudges help build habits.
• Offer expansion revenue. Encourage upgrades, add-ons, and higher-tier plans.

The best growth engines keep their customers coming back for more as often as possible.

4. Financial management

When you start your company, you can get away with a small amount of capital. You don’t need a huge team or fancy offices. Many startups at this stage can bootstrap or raise a small round from friends, family, or angels.

But when you scale, everything gets more expensive. You need more people, better infrastructure, and a bigger marketing budget. The costs rise before the revenue does. That’s why most companies need funding to scale.

The problem is, raising money doesn’t magically fix bad unit economics. If every new customer costs more than they bring in, more funding just delays failure. Here’s what you need to have in place.

4.1 Plan financials for growth

Scaling is expensive. Even if your business is profitable, growth usually requires investment. You need to hire more people, spend more on customer acquisition, and build infrastructure to support more users.

Many startups run out of money at this stage because they don’t plan ahead.

You need to answer the question: are you making more money per customer than you’re spending to acquire them? The two most important numbers to track:

• Customer Acquisition Cost – How much it costs to acquire a new customer. You can lower this cost through improved conversion rates, reduced reliance on paid ads, and more referrals.
• Customer Lifetime Value – How much revenue you make from a customer over their lifetime. You can increase this with improved retention, upselling and cross selling, and additional pricing tiers.

Growth isn’t just about getting customers. It’s about getting them profitably. If every new customer costs you more than they bring in, your business won’t scale.

Once you’ve got this, you can start to monitor:

• Cash burn rate. How much are you spending each month? How long will your current cash last?
• Runway. Do you have enough cash to last at least 12-18 months? If not, you need to raise money or cut costs.

The best founders always know their numbers. They don’t just focus on growth, they make sure the business can survive while growing.

4.2 When to raise money

There’s a simple rule for startups: raise when you need capital to grow, not when you’re running out of money.

Many founders wait too long to raise. They focus on the product and ignore fundraising until their runway is almost gone. Then they’re forced to take bad terms because they have no leverage.

Others raise too soon. They pitch investors before they’ve proven product-market fit, hoping money will help them figure things out. It won’t.

The right time to raise is when:

• 1. You have clear demand. People want your product, and they keep coming back.
• 2. You have a repeatable growth model. You know how to get customers profitably.
• 3. More money will directly lead to more growth. You know where to spend it.

If you don’t check these boxes, you probably don’t need funding yet.

4.3 How much money should you raise?

Once you do need funding, the best founders raise enough to reach the next major milestone, but not so much that they lose focus.

The biggest mistake startups make is raising too little. If you only raise enough for 6 months, you’ll be back fundraising before you’ve made real progress. Investors don’t want to fund companies that are always running out of cash.

A good rule of thumb is to raise enough to last at least 18 months. That gives you time to execute, hit milestones, and raise the next round on stronger terms. Think about it in stages:

• Seed Round: Usually enough to prove product-market fit and get first customers.
• Series A: Funds scaling revenue and building a repeatable acquisition model.
• Series B and Beyond: Funds expansion into new markets, new products, and bigger hires.

Raising too much can be just as dangerous as raising too little. If you have too much money, it’s easy to waste it, hiring too fast, spending on the wrong things, and losing the discipline that made the company work in the first place.

4.4 What type of funding do you need

There’s lots of different ways to fund your startup.

Not every startup needs venture capital funding. Venture capital works if you’re in a market where speed matters more than efficiency, where being the first to scale is the difference between winning and losing.

If you do decide to raise money, know that investors are taking a bet on your team and idea. At the scaleup stage, they look for real numbers, so they want to see:

• Revenue growth. Are you growing consistently?
• Unit economics. Do you make more money per customer than you spend to get them?
• Retention. Do customers stay, or do they churn after a few months?
• Scalability. Can you grow without costs rising just as fast?

At this stage, it’s not enough to have a good idea. You need a business that already works, and you need to be able to show investors proof of that.

But many companies don’t need VC money. If you’re in a business that grows steadily over time, bootstrapping might be better. It gives you control and forces you to focus on profitability. Other funding options:

• Debt financing: Works for companies with stable revenue that don’t want to give up equity.
• Grants and government funding: Some industries (climate tech, deep tech) have non-dilutive funding options.
• Revenue-based financing: If you have predictable revenue, you can raise money based on future income.

The best funding strategy depends on what kind of company you want to build. If you want to grow as fast as possible, VC makes sense. If you want long-term control, bootstrapping or alternative financing might be better.

5. Culture and leadership

When a company is small, everything is simple. Everyone knows what’s happening. Culture happens naturally. If there’s a problem, the founders fix it immediately.

But as you grow, things change. New people join who weren’t there from the beginning. Communication gets harder.

The founders can’t be everywhere at once. And if you don’t pay attention, the company turns into something completely different – and not always in a good way.

The best founders scale culture and leadership so the company stays strong no matter how big it gets.

5.1 Hire strong people

As you scale, you need more specialists. You need people who are really good at one thing instead of decent at many things.

The challenge is hiring the right people at the right time. This is a rough breakdown:

1. Early stage (1-10 people): Everyone wears multiple hats. Focus on generalists.
2. Growth stage (10-50 people): Start hiring specialists in marketing, sales, and operations.
3. Scaleup stage (50+ people): Bring in experienced executives who’ve scaled a company before.

The best founders are great upskillers and great recruiters. They spend a huge amount of time finding the right people.

Because in the end, a company is just a group of people working toward a common goal. The better the people, the better the company.

5.2 Keep culture strong

When you’re small, culture just happens. You don’t need to define it, everyone knows how things work.

But as you grow, if you don’t actively shape the culture, it will shape itself. And that’s risky. The best companies scale culture intentionally. Here’s ways to do this:

• Write down what matters. Codify your values so they’re clear to everyone.
• Hire for culture fit. Skills can be taught; mindset is harder to change.
• Keep traditions alive. The little things – like team rituals, inside jokes, or how meetings are run – help preserve culture.

The companies that keep their culture strong are the ones that actively protect it.

5.3 Build communication systems

One of the first things that breaks in a growing company is communication.

When you grow, things start falling through the cracks. Teams start working in silos. Decisions take longer. People get frustrated because they don’t know what’s going on. Good founders fix communication before it becomes a crisis.

Here’s how you can do this:

• Over-communicate the vision. Repeat the company’s mission constantly so everyone stays aligned.
• Have clear decision-making processes. Who makes the call on what? Make it obvious.
• Keep meetings efficient. Too few meetings cause chaos. Too many kill productivity. Find the balance.

Communication isn’t just meetings and emails, it’s making sure everyone is rowing in the same direction.

5.4 Fight against politics and bureaucracy

A lot of startups die when they start acting like big companies.

They add layers of management. They slow down decision-making. They spend more time in meetings than actually building.

The best companies fight bureaucracy as they grow. They keep things fast, flexible, and focused. Here’s how to avoid politics:

• Keep teams small. Small teams move faster and take more ownership.
• Make decisions quickly. Default to action instead of endless debate.
• Don’t reward empire-building. If someone is trying to create more layers of management just to gain status, that’s a bad sign.

A company’s speed is one of its biggest advantages. Don’t let it slow down just because you’re getting bigger.

5.5 Move from builder to leader

In the early days, you win by doing, writing code, selling to customers, shipping features. But as you scale, you win by leading, setting the direction, hiring the right people, and making sure the company stays focused.

This is hard for a lot of founders. They’re used to being in the trenches. Letting go feels uncomfortable. But the companies that scale well are the ones where the founder learns to step back from the day-to-day and focus on the big picture:

• Spending more time thinking about strategy. Where should the company be in 3-5 years?
• Trusting your team. If you hired the right people, you don’t need to micromanage them.
• Focusing on what only you can do. Vision, culture, and making sure the company doesn’t drift.

Great founders reinvent their role as the company grows. If you’re still doing the same things at 100 employees as you were at 10, you’re probably not scaling yourself fast enough.

6. Case studies

The best way to understand how to scale is to look at startups that did it well, and the mistakes others made along the way.

Some companies scaled too fast and burned out. Others scaled carefully and became industry leaders. If you look closely, you’ll notice a pattern: the best companies didn’t just grow, they built a system that could handle growth.

6.1. Case study: How Shopify scaled by helping customers grow

Shopify is a great example of a company that scaled the right way.

In the beginning, Shopify was just a simple tool to help small businesses set up online stores. It wasn’t trying to be everything for everyone. It focused on one thing: making it easy to sell online.

As Shopify grew, they scaled in a way that helped their customers scale. Instead of just adding more users, they built features that made their users more successful, things like payment processing, shipping integrations, and marketing tools.

In helping customers make more money, Shopify made more money too. Their revenue wasn’t just based on subscriptions, it grew as their customers’ businesses grew. So what are the lessons from Shopify:

• Grow by making your customers more successful. If your customers win, you win.
• Expand features based on real needs, not just to chase growth. Every new product Shopify built helped their users.
• Think about long-term scalability from the start. They didn’t rely on a single revenue stream, they built multiple ways to make money.

Shopify could have failed if they tried to compete with Amazon directly. Instead, they scaled by empowering their users, which made their growth sustainable.

6.2. Case study: Why WeWork collapsed at scale

WeWork looked like a rocket ship. It raised billions in funding, opened locations around the world, and expanded at an insane pace. On paper, it seemed like the perfect example of a startup scaling into a global giant.

But WeWork didn’t scale the right way. Rather than making sure the business itself was profitable, they focused on rapid expansion. They signed expensive leases, spent lavishly on offices, and hired thousands of employees, all without making sure the unit economics worked.

The problem was that WeWork was spending more money than it was making. They believed that growth itself would eventually fix the business.

But when investors started looking closely at the numbers, they realised WeWork wasn’t a sustainable company, it was a money-burning machine. Here’s the lessons from WeWork’s failure:

• Growth doesn’t fix a broken business model. Scaling a bad model only makes the losses bigger.
• Raising billions doesn’t mean success. Money can hide problems for a while, but eventually, reality catches up.
• Sustainable businesses scale better than hype-driven ones. If your model doesn’t work without constant fundraising, it’s not a real business.

WeWork’s mistake was thinking they could scale before they had a solid foundation. They expanded too fast, hired too many people, and assumed they could fix their problems later. But when reality hit, they couldn’t recover.

Final thoughts

A startup is a delicate system held together by sheer effort. As it grows, the weak parts get exposed. If you don’t fix them, they break.

The best companies scale by focusing on the right things at the right time. They don’t just chase growth for growth’s sake. They make sure:

• 1. The product is something people truly want. If you don’t have product-market fit, nothing else matters.
• 2. Growth is repeatable and profitable. If every new customer costs more than they bring in, scaling only burns money faster.
• 3. The company itself scales. Teams, systems, and culture need to grow as much as revenue does.
• 4. The founders evolve with the company. If they don’t adapt, the company outgrows them.

Scaling is hard. It forces a company to reinvent itself at every stage. The best founders see these shifts coming and adapt.

If you do it right, growth isn’t something to fear, it’s something to enjoy. Because instead of just running a startup, you’re building a company that endures.

Is your startup ready to scale? Join our scaleup community at Stone & Chalk to access everything it needs to expand; from export opportunities to investment, talent and workspaces for your growing team.