Many people confuse “growth” with “scale.” In reality, these two terms represent different stages of business growth. The best way I can describe the difference is:
Growth is your journey. Scale is your destination.
At York IE, we work with companies across all stages of growth — and we’re experienced operators who’ve lived the journey ourselves. As an entrepreneur, it’s crucial to know which stage you’re currently at. That way, you’ll have a better understanding of which growth levers to pull and which pitfalls to avoid at each inflection point.
What Is the Growth Stage?
The stages of business growth are usually talked about relative to funding rounds. People will say, “I’m a Pre-Seed founder” or “We’re a Series C company.”
But regardless of whether or not you ever raise money, I can still qualify a company as a “Series A company” or a “Pre-Seed company” based on the criteria they’ve met and the milestones they’ve achieved.
So with that in mind, think of the Growth stage as the equivalent of a Series B. At this stage, you’ve steadily grown your business for the past several years, and you’ve reached the point where it’s time to swing for the fences. If you’re doing $10 million in ARR, how can you get that to $20 million or $30 million?
It’s during this phase that you fully realize the potential of your company.
What Is the Scale Stage?
Only after you achieve your Growth stage goals do you become a scale-up or scale-out company. And that’s where things get really interesting.
The only stage left after Scale is Exit (if you so desire). And if you’re going to pursue that path, either through IPO or acquisition, you very well may need to completely overhaul your operating model — and bring on new leadership to execute against it.
Even if you’re not planning an exit, scale-out companies typically need to put new layers of management and processes into place, too.
The 8 Stages of Growth
Here’s how I define the entire business growth journey:
- Initial Revenue (Pre-Seed)
- Product Market Fit (Seed)
- Foundational (pre-Series A)
- Expansion (post-Series A)
- Growth (Series B)
Wherever you are on your growth journey, make sure you’re always in the driver’s seat. Focus on increasing your revenue in a repeatable, sustainable way. Preserve your optionality. And always play the long game!