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Startup growth in Europe: why should you stay true to yourself to scale up?

Startup growth in Europe: why should you stay true to yourself to scale up?

June 15, 2022

2021 was a record-breaking year for fundraising in Europe, but investment activity has slowed down recently. This new and uncertain environment has left startups with a bleaker long-term outlook.

This idea was identified through qualitative, open and authentic interviews with 40 leaders of some thirty French and European startups and can be broken down into five fundamental principles for the successful scalability of a company.

Scaling up: a matter of identity

The work conducted by Roland Berger shows that a company's identity is much more than a slogan or a logo. It refers to the creativity and capacity to innovate of the startup, an entrepreneurial spirit that will allow it to stand out and grow with authenticity and prosperity. This identity is formed at the crossroads of 5 fundamental principles.

"All the leaders that we interviewed mentioned a major principle: the only thing that matters when scaling up is staying true to yourself."
Portrait of Anne Corteggiano
Director, Press Contact
Paris Office, Western Europe

1. Create a powerful and unifying value framework

In order to guide decision-making and the conduct of all the company's activities (sales, staff, management, environment), the establishment of a powerful and unifying set of values is essential. At the very foundation of any start-up, the definition of core values plays a crucial role. In order to ensure their continuation, these values must be respected and embodied by everyone starting with the managers.

Moreover, a company's image is reflected in the positive impact it has on society and the environment. The commitment of all employees will therefore be all the stronger if the company's values are meaningful and in line with CSR criteria. In France, the entry into force of the PACTE Act and the introduction of mission-based companies has established and formalized the importance of CSR in the founding of companies.

2. Build and support an agile team

In a second phase, the study recommends the creation of a team with complementary talents, capable of blossoming along each growth phase. In the context of the “war for talent”, startups must work on their employer brand in order to attract the best national and international profiles, especially tech profiles.

To ensure the retention of their talents and build loyalty, startups must immerse them into their corporate culture. Therefore, the values must be transparently exposed right from the beginning of the recruitment process. Most importantly, they need to ensure that employees believe in the project and are all moving in the same direction. Many recruitment mistakes stem from a misjudgment of the harmony between the corporate culture and the candidate's own values, and incompatibility can have serious consequences.

3. Adopt a relevant strategic plan

Startups need to define a relevant strategic plan to grow, coupled with a long-term vision, from customer go-to-market to international expansion. To do this, companies must keep an eye on product market fit and make a point of retaining customers. In the early days of a start-up, most of the resources are devoted to designing its product or solution, with the immediate objective of reaching many consumers in a record time. Once the product market fit is found, it is necessary to identify the business model that best suits the product in order to sustain its existence.

The managers interviewees say that startups can then expand internationally by establishing strategic commercial partnerships and on the condition that they mobilize sufficient resources. International expansion is one of the keys to scaling up, especially when a company's home market is not large enough to reach critical mass.

4. Enable high quality of execution and automation

Quality of execution and automation are factors of professionalization and good governance, the study reveals. By structuring teams and automating low value-added tasks, startups will gain efficiency and therefore output. While many startups start with a flat organization, it is often necessary to rethink the governance model as they grow, adding a layer of middle management to solidify their structure.

Startups also need to develop their network of influence. This means participating in key tech events, which are the perfect opportunity for startups to speak in front of their peers and their core target audience.

"Identity is what drives managers and their employees to develop a project. It is a company's greatest asset for reaching not only growth milestones, but also excellence."
Portrait of Nicolas Teisseyre
Senior Partner
Paris Office, Western Europe

5. Aligning funding with the company's ambition and observing temperance

Finally, to secure their growth milestones, startups need to define clear and sequenced funding targets over time, by leveraging the best partnerships at each stage of growth.

At the European level, governments are now addressing the issue of financing innovative startups with high growth potential by offering numerous financial schemes. Startups can thus rely on the multiplier effect of the public sector by adopting a strategy of mapping available public funds (grants, loans, investors, etc.) at the national and European level.

This study conducted by Roland Berger eventually shows that the identity of a company is its main asset to ensure a long-term development.

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Study

Startup growth in Europe: why should you stay true to yourself to scale up?

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2021 was a record-breaking year for fundraising in Europe, but investment activity has slowed down recently. This new and uncertain environment has left startups with a bleaker long-term outlook. This idea was identified through qualitative, open and authentic interviews with 40 leaders of some thirty French and European startups and can be broken down into five fundamental principles for the successful scalability of a company.

Published June 2022. Available in
Portrait of Nicolas Teisseyre
Senior Partner
Paris Office, Western Europe
+33 1 5367-0973
Portrait of Laurent Benarousse
Senior Partner, Member of Supervisory Board, Managing Partner France
Paris Office, Western Europe
+212 529 0113-54
Portrait of Anne Corteggiano
Director, Press Contact
Paris Office, Western Europe
+33 15 3670-357
Portrait of Christian Heinis
Partner
Paris Office, Western Europe
+33 1 7039-4110
Portrait of Matthieu Simon
Partner
Paris Office, Western Europe
+33 1 7092-8937
Portrait of Marie De Narp
Principal
Paris Office, Western Europe
+33 1 53 67-0382
Portrait of Emmanuel Touboul
Managing Director Roland Berger Tech Ventures
Paris Office, Western Europe
+33 6 6916-9769
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