Best Way to Grow Your Startup:

Starting a business is exciting, but many entrepreneurs rush to grow without thinking long-term. According to Wharton professors Ronnie Lee and Danny Kim, taking time to build your startup carefully leads to better success than rushing into scaling up.

Best Way to Grow Your Startup:

Why Moving Too Fast Can Hurt Your Business

When Ronnie Lee started his own tech company in college, he followed advice from investors who told him to move fast, avoid bureaucracy, and beat competitors quickly. But this approach backfired. His company spent money trying to grow without a clear strategy, which led to its failure.

Years later, Lee, along with fellow professor Danny Kim, researched the risks of growing businesses too soon. Their study, published in the Strategic Management Journal, looked at over 38,000 startups in the U.S. They found that businesses that scaled within the first 6 to 12 months were 20% to 40% more likely to fail compared to those that waited.

Surprisingly, early scaling did not improve chances of success through acquisitions or IPOs. This challenges the popular “move fast and break things” mindset seen in many startups.

Patience and Experimentation Are Essential

Lee and Kim believe entrepreneurs should focus on building a strong foundation before growing. They studied over 6 million job ads to understand when startups begin hiring managers, sales teams, and others. Most successful startups took around four years to scale.

The study also shows that companies that grow too fast often skip experimentation, such as A/B testing. Experimentation is important to test products, services, and business models before investing heavily. Without it, startups may waste money scaling ideas that aren’t sustainable.

Lee advises founders to have patience, test their business models, and embrace changes when needed. This reduces the risk of failure and helps build a scalable, long-term business.

Learning from PillPack’s Success

One successful example is PillPack, an online pharmacy launched in 2013. The company spent several years experimenting before scaling up in 2016. They developed PharmacyOS, a platform to manage medications. After reaching \$100 million in revenue, PillPack was acquired by Amazon in 2018.

Their careful approach shows that scaling slowly with proper planning leads to lasting success.

When Early Scaling Works

Though risky, there are rare cases where early scaling works. If a company wants to quickly exit the market or gain monopoly control before competitors copy them, rapid growth might be the right choice. But such situations are uncommon, and most investors now prefer to wait before funding startups that show quick but unsustainable growth.

Final Advice for Entrepreneurs

Lee’s biggest lesson for entrepreneurs: Don’t rush. Focus on what not to do, experiment, test your ideas, and build with care. Moving too fast without a clear strategy can create a weak business that fails under pressure.

In short, patience, careful planning, and testing are the safest paths to growing a successful startup.

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