Avoid Business Overexpansion: Will Glitter Bomb…bomb?

DynamicWeb

The site quickly went viral, attracting attention from major media outlets around the world, blowing up on social media, and even mentioned on Late Night TV. But within a week, the highly talked about online service site was up for auction on Flippa.com.

In the founder’s own words, “I launched this website as a bit of a joke not expecting this level of attention….It’s taken on a life of its own, and I want to watch it continue to grow under a new owner.”

Having too many customers may seem like an entrepreneur’s fantasy come true. However, Ship Your Enemies Glitter is a cautionary tale of startup overexpansion, a business-killing miscalculation that usually results in unhappy customers and overwhelmed business owners. It is especially easy to over-expand in ebusiness, where a small business can be buried in a world of orders. Abandoned, unfulfilled orders are common occurrences on Kickstarter, where prototype products, such as Radiate Athletics’ color-changing clothing, can overshoot their fundraising targets, be left with hundreds of orders, and no way to produce the pledged products on such a mammoth scale and within a reasonable time frame.

Most small ebusinesses do not have the resources or experience to expand rapidly in order to survive a viral craze.  So, especially with a ‘can’t miss’ idea, it is important to focus on steady growth in order to sustain success. One method of managing initial growth is to gradually increase the number of people who can place orders. Bay Area food delivery app Spoonrocket, for example, offered exclusive membership to the first few people who signed up for the service before their official launch. Gradually, they allowed members to send membership invitations via email, and once their capabilities expanded (kitchens, drivers, etc), they allowed anyone to sign up for the app.

Another way of stemming an expansion crisis is by bringing in more people to help. This can mean hiring out order fulfilment to other companies, or it can mean hiring internally ahead of need and delegating tasks within the company. If you are hiring within your company (via an HR firm, a resume database service like Monster, or a native application section on your website), you already have the advantage of positive attention garnered from your growth, and this will help you attract the best talent. Begin your search by identifying the core values that have brought your company success thus far. Determine how you will identify these traits in potential candidates (through a questionnaire section or an interview question), and you will be able to grow without sacrificing the integrity of your company.

Eager customers for your business idea is exciting, but sometimes a good idea without a plan for feasible growth can spell its own doom. Don’t end up as a one person lemonade stand with a line around the block—gauge the public’s interest ahead of time, plan to expand in a manageable way, and prepare to bring real value to your customers, consistently and over a long period of time.