Operating Your CRE Company Like a Hypergrowth Startup
While hypergrowth may seem like a nice situation for any business, managing it isn’t easy.
The slightest misstep or hesitation in decision-making can mean a missed opportunity or strategic failure.
What are we trying to say with the term ‘hypergrowth?’
A ‘hypergrowth startup’ is a new business that undergoes double-digit growth within a short period after launch.
Companies at this stage welcome a surplus of new customers and, in turn, face a flood of production, sales, and unforeseen challenges.
The CRE sector has witnessed its fair share of operators with just one property who went from managing a few units to overseeing thousands of doors in a surprisingly short time frame.
But many have also collapsed under the weight of sudden acceleration.
In this article, we examine the top five lessons that commercial real estate owners can draw from hypergrowth startups.
Hypergrowth companies move fast.
They have few employees, no organizational silos, and little bureaucratic obstacles.
A company with this setup is dynamic and can make strategic decisions with ease.
Startups that move quickly respond to emerging crises and seize new opportunities while the windows are open.
Commercial real estate firms can adopt a similar fast-paced approach by reducing paperwork requirements, decentralizing organizational hierarchies, and avoiding decision paralysis when evaluating opportunities.
In doing so, real estate owners launching their operations can better position themselves to dodge transactional pitfalls, contract with the right partners, and secure the best deals.
Stick to one goal
Hypergrowth startups tend not to focus on multiple, unrelated business objectives at the same time.
Instead, they prioritize just one central goal that yields the best odds of survival at this stage of expansion.
When employees and stakeholders aren’t clear on operational priorities, internal confusion and wheel spinning ensue.
In contrast, a startup focusing on just one short-term goal, such as ‘onboarding new customers,’ will align its staffs’ activities and minimize internal discord.
Commercial real estate firms can also set and single-mindedly commit to an immediate objective by picking one bench mark — like ‘assets under management’ or ‘monthly cash flow’ — and insisting everyone work toward its execution before progressing to the next milestone.
Tech entrepreneurs know that innovation is a lengthy process that consumes immense amounts of money, energy, and personal resources.
They also understand that developing cutting-edge tools is secondary to addressing present-day demands.
In CRE, that often means prioritizing raising capital and building a lean operation that will get the venture to positive cash flow by the most efficient path.
Prioritizing practicality is why some startups avoid — or passively pursue — product and brand innovation during a whirlwind growth cycle (unless you’re in tech).
Indeed, innovation is crucial to your long-term success.
But starting out, you’ll need to balance technological advantage with the practical demands of generating sufficient short-term revenue.
There are plenty of success stories of startups adapting to the challenges of hypergrowth.
Still, all of them could only manage that sudden, aggressive growth because they stayed organized.
Early on in the execution of their strategies, successful company founders emphasize standardizing business operations throughout their growth phase.
This allows them to maximize opportunities, improve delivery time, and build a loyal following of clients and investors.
Likewise, in commercial real estate, the intentional organizers gain the edge.
Disorganization in this dynamic market has devastating effects, such as lost deals, unexpected operating costs, and money left on the negotiation table.
Commercial real estate owners can stay organized when scaling by incorporating the right technologies and internal systems to track paperwork, automate processes, and monitor properties.
Teamwork is key
Hypergrowth startups can’t accommodate internal disconnects.
Rather, startup culture is centered on transparency, integrity, and communication.
Smart founders promote cooperation among employees and focus on designing open and unifying organizational cultures and workspaces that facilitate collaboration.
The intent is to eliminate unhealthy internal competition, stress, and productivity blocks, which can derail a company’s momentum.
In commercial real estate, harmony among all internal and external stakeholders is vital — anecdotes of once successful CRE enterprises left in shambles due to internal feuding and stubborn leaders are common.
Observe startups and build your playbook
Commercial real estate owners and operators can learn a lot from hypergrowth startups.
Entrepreneurs successfully manage growth as a startup by moving fast toward one goal without being distracted by internal strife, unnecessary R&D, and disorganization.
These powerful hypergrowth strategies provide commercial real estate firms the best playbook to prepare their operations for fast growth.