Christine Hunsicker, CEO of clothing rental company Gwynnie Bee, knew she had a good problem on her hands when the laundry services her company used were having trouble keeping up with their orders. But she also knew it was a problem she had to manage, or her growing startup would have problems retaining customers who weren’t getting their orders in time.
How to grow quickly but also sustainably is a tricky question for any entrepreneur: too slow and the business fails, too fast and the company can’t keep up with demand.
Too much growth “absolutely could have killed our business,” says Hunsicker, who is also the CEO of technology platform CaaStle, speaking at a panel at the Fast Company Innovation Festival in New York City on Tuesday. “And so we made sure we understood exactly how we were getting people and what kind of escape hatches we would have if things started to go one way or another.”
“For the first four years, we actually kept growth very metered, and made sure we had channels we could throttle at all times,” she says. “If we started to take off for some reason, like a Today Show mention, we could pull back . . . and make sure we were keeping the growth really consistent and never get ahead of what percentage we were looking to target.”
The secret she and three other CEOs made clear was to make sure you are growing as part of a sustainable plan, and not at the behest of investors–or says Katherine Power, CEO of marketing and consumer brands company Clique, out of a perceived need to keep up with competitors.
Power bootstrapped her company for the first six years before taking any outside investment. “We were tempted to grow much faster and raise a bunch of money,” she says. “I definitely looked around at other e-commerce players and thought, ‘Why aren’t we at that level? They’re getting all this press and hundreds and hundreds of millions of dollars.’ And those businesses have since gone out of business.”
Taking the money that’s headed in the same direction
The issue is that tech companies have set incredibly high expectations for all companies, even if the business model is different and responsible growth is the goal. “That type of exponential growth, reflected in a business where you have people and physical space to manage, can be a challenge,” says Chris Kelly, president and cofounder of real estate startup Convene. “It’s just like driving a car faster: At some point there becomes a speed where you can’t go through the twists and turns responsibly anymore.”
And while not every company can make it without outside investment–and the pressures for growth that come with it–it’s still possible to make sure those investors are on board with a plan for managed growth. It just means being willing to walk away.
Marcela Sapone, the CEO of in-home hospitality company Hello Alfred, explains that her company’s model, from the start, was to use only full-time employees, not contractors. When a prospective investor demanded she change the model, she held firm. She lost the investment, but feels that standing by her values led to more sustainable growth.
“Long term, when you align your investors to your personal values and to the ultimate vision that you have, you’re setting yourself up for success,” she says. “So don’t just take any money. Take money that’s headed in the same direction.