News this week that Uber’s CEO was stepping down likely was not a surprise to those who have been following the company in the headlines.
Why Startups Like Uber Stumble Over Problems They Could Have Avoided
Research shows that rapidly growing companies—especially fast-growing start-ups like Uber—face a high risk of stumbling. One of the hardest acts in business is scaling a business rapidly and profitably. Bain’s research concludes that of all new businesses registered in the US, only about 1 in 500 will reach a size of $100 million—and a mere 1 in 17,000 will attain $500 million in size and also sustain a decade of profitable growth. More often, they trip over themselves. Research for our book The Founder’s Mentality found that 85% of the time, the barriers to growth cited by executives at rapidly growing companies are internal—as opposed to, say, external threats such as unreceptive customers, a misread business opportunity or the moves of a dangerous competitor. With so many company growth stories coming undone because of internal causes that their leaders could have controlled, boards, leaders, investors and advisors should assess, early and often, the general health of a business and its ability to grow to large scale.