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What are the most critical barriers to scaling a consumer technology business and how do you overcom

Answered by: Andy Hunt

Like many of my colleagues at Highland, before I became a VC, I was an entrepreneur. I founded Warby Parker Eyewear in 2008 with three classmates from Wharton. Over the last four years, the company has experienced significant growth. While the growth may have looked relatively smooth to an outside observer, it wasn’t without substantial challenges and more than a few sleepless nights. Engineering hurdles, problems growing our team quickly enough, supply chain issues – we’ve had them all. Most businesses experience significant challenges when trying to scale, and they fall into four general categories:

1. Hiring. Every startup is in a hiring war for the best engineering, marketing, design, financial and sales talent. The best teams usually win and companies that can’t keep up, or make poor decisions, fall behind quickly. For most startups, the most critical barrier to scale is the inability to build a top-tier team.

2. Acquiring customers / users. For most young companies, effectively acquiring users is the most significant challenge. Achieving scale is usually the result of two things: excellent product and brilliant marketing. First (and of course this is the really difficult one), build products that solve real problems. Second, hustle. The best channel partnerships, PR and marketing deals are given to those that hustle tirelessly. Third, be creative. Buying adwords and SEO are rarely the most effective way to drive traffic. Use offline events, reach out to bloggers and influencers and find unusual ways to get attention. Fourth, constantly experiment with new marketing channels. Most marketing channels are effective over a short term horizon before they effectively tapped out and become prohibitively expensive. New mediums create arbitrage opportunities for young companies to acquire customers inexpensively (i.e. Zynga via the social web, Groupon via targeted email, etc.).

3. Raising capital. The capital markets are never in your control. Raise money when you can and always give yourself as much runway as possible. For many young companies, access to capital is the most significant barrier to growth.

4. Adapting. The web changes rapidly, as does consumer behavior. To keep up, companies must be able to adapt quickly. This means a flexible code base, an experienced product team and effective analytics and measurement tools.