What it takes for successful startups to keep growing

In recent years, the pressure from investors on already successful start-ups to keep growing faster and faster has been intense. Reaching a $100 million valuation, a notable achievement in its own right, left little time to celebrate; the venture capital (VC) firms that invest in these companies expect their value to reach $1 billion or more—and to do so quickly. Yet less than one in ten manage this feat in under four years.Earlier this year, a McKinsey team featuring Kim Baroudy, Giacomo Dolci, Sid Ramtri, and Harry Schiff set out to better understand that dynamic, to learn why it is that so many already successful start-ups struggle to maintain their rapid pace of growth. The result of that research is their recent McKinsey article, “Hard choices: How Europe’s fastest-growing start-ups become unicorns.” On today’s episode of McKinsey on Startups, one of the co-authors, Associate Partner Sid Ramtri, explains the key findings of the research, which identified principles to guide leaders of European scale-ups through some of the critical trade-offs and decisions that mark this period in their development.

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