Traction Watch: How Spredfast Handled A Growth Bump

After merging with Mass Relevance, Spredfast had to absorb 150 new employees in a single day. This is how it managed its growth.

spredfast infographic

Editor’s note: Traction Watch is a new column focused obsessively on growth, and is a companion to the DEMO Traction conference series, which brings together high-growth startups with high-potential customers. Companies can apply here to showcase, or those similarly obsessed can register here to attend.

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Growth is usually a good thing, but it can cause executives some serious headaches. A new influx of cash or a quick rise in employees will make investors happy, but it’s also a whole new set of problems for management and can actually cause small companies to stumble. When the Austin-based social engagement company Spredfast tripled the amount of revenue last year and doubled their employee headcount, it faced its most challenging period since its launch in 2010.

Favaron

For CEO and president Rod Favaron, the big changes occurred when the company merged with Mass Relevance in April of last year. They were two halves of a coin. Spredfast had focused primarily on social networking as a function of marketing and trendspotting. Mass Relevance was all about data mining and discovery. The merger made sense because, at least for many companies, social networking is a way to track marketing efforts and trending topics. Yet, it’s also an incredible goldmine of data discovery, especially over long periods of time.

That all sounds like a big win, but small companies that grow quickly sometimes don’t know how to handle the growth. They respond by adding business rules or tightening the purse strings. In a small office located near downtown, the employee count rose from 150 to 300 in a single day, which meant they had to rethink how they ran company meetings, whether they would continue to offer free on-premise lunches (they did), and even the basic office layout, which resulted in having to remove a few walls. Eventually, they had to reorganize their sales team as well.

Of course, those are logistics and building management issues. The other challenge, as Favaron explained to me in person during the South by Southwest conference in March, is to keep innovating like a startup with only a few employees. At that size, you have to think on your feet and invent new products because it’s the only way to stay alive.

Spredfast is essentially a dashboard that shows you how well your company is performing on social networks -- for example, if people on Twitter and Facebook are talking favorably about your brand. The core product attracted heavyweights like Hyatt, Viacom, Brooks Brothers, General Mills and PNC Bank. The product has been used to track social engagement at events like the FIFA World Cup, the Super Bowl Halftime Show, The Oscars and SXSW.

Spredfast product

The company decided to respond to their success not by continuing to push the basic dashboard product, but by adding new features and product extensions to make the whole experience more useful. Spredfast Intelligence is a beautiful-looking graphical dashboard that shows a history of social networking trends. Spredfast Spark is a way to track conversations right down to the specific user level. Favaron calls this concept a “success fail” in that they decided to respond to the growth by attempting to build brand new features. He says, if the new features failed, at least they would learn lessons about what they did wrong and there would be a new undertaking for all of those new employees in the new office, a rallying point for everyone involved. So far, the features are “sparking” even more interest. Favaron says the company is now managing over 1 billion social connects and the dashboard supports 83 languages.

Still, there were a few mistakes. Spredfast did start feeding everyone for lunch, but they tended to provide way too much food and had to scale back. When they did the sales reorganization, the company had to keep tweaking the structure a few times. Fortunately, those issues were relatively minor.

The good news? Favaron says the company plans to keep using the “success fail” model and push harder by adding more features. Growth happens when you don’t let the previous successes hold you back, when you keep striving for greater challenges.

This story, "Traction Watch: How Spredfast Handled A Growth Bump" was originally published by CIO.

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