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Startupedia: What Does Scaleup Mean?

What is a scaleup?

Just when we’ve finally wrapped our heads around the concept of a ‘startup company’ (and all the terminology that goes along with it), there’s a new kid in town that’s causing a stir in the business and entrepreneurship community: the scaleup company.

‘Scaleup’ is a term first made popular by leading entrepreneur and TEDx speaker, Sherry Coutu, and Frank Nouyrigat, co-founder of Startup Weekend. Scaleup companies are predicted to represent the next wave of the ‘Startup Revolution,’ so to be in-the-know you need to know what they are, and how they differ from startups.

Let’s begin with an analogy:

Think of a startup company as a young child. As for a child, each day for the startup is a new learning experience. The questions and possibilities for what the company can become seem endless.

With that in mind, think of a scaleup as a teenager. In a scaleup, the foundation has been set for what the company will become, and instead the company’s priorities move towards trying to figure out how they’re going to get there. And, like teenagers who grow rapidly and undergo a lot of changes in a short time, the growth and expansion of the company begins to pick-up speed across a variety of metrics including market access, revenue, and number of employees.[bctt tweet="If a #startup is a young child, a #scaleup is a teenager, says @monique_lees"]

In order to achieve this rapid growth and expansion, a scaleup requires a business model with a proven track-record for generating repeat business in the company. Many startup companies can make it off the ground but, without a repeatable and scalable business model, it will be very difficult for a startup to evolve into something bigger. Scaleups are those high-growth companies that have cracked the code to scaling and are gaining serious traction.[bctt tweet="A #scaleup is a young co. that cracks the code and becomes a force, says @monique_lees"]

9 examples of scaleups:

1) Hubspot: 501-1000 employees


2) Avant Credit: 201-500 employees


3) InsightSquared: 51-200 employees


4) Narrative Science: 51-200 employees

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5) Context Media: 51-200 employees

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6) Buildium: 51-200 employees


7) Swipely: 51-200 employees

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8) Maxwell Health: 51-200 employees


9) Localytics: 51-200 employees


How does a company scale up?

Just as a child and teenager are the same person in different stages of growth, startups and scaleups are not two distinct entities; before a scaleup can exist, the company must first begin its life as a startup.

The goal of a scaleup company is not only to grow, but to do so in a manner that doesn’t compromise the revenue generation or company performance established in its early stages. There a few things a startup can do to increase their chances of becoming a successful scaleup company:

  1. Hire the right people
  2. Make sure the company’s product has achieved ‘market fit’ and core users identified
  3. Make sure the company can afford to increase production
  4. Automate as many processes (payroll, training programs, billpay, cloud storage etc.) as possible
  5. Determine marketing channels with the biggest ROI and then boost marketing through those channels as the company begins to scale up[bctt tweet="Good hiring is key to turning a #startup into a #scaleup, says @monique_lees"]

Why are scaleups important?

There has been a lot of focus in recent times on the ability for startup companies to have a large and positive impact on local economies through job creation, collaboration with local businesses and increased market competition.

However, the high failure rate of startups across the world has lead this focus to shift to those companies who've demonstrated a proven track record, high growth, and potential for success: scaleups.

Add 'scaleup' to your business vocabulary, because-- unlike most startups-- scaleups are here to stay.