Much has been written, discussed, opined, and theorized about scaling in the startup industry. Countless articles have been written and MBA case studies prepared on this perennially elusive trait that early-stage companies have to master to achieve growth Nirvana.
So, what is scaling? Put simply, it is the ability to replicate accumulating tactics and strategies on a regular basis to a point where your startup grows in revenue, customers, brand, etc. without compromising on solid financials like profitability. In other words, it is favorably impacting “both sides of the balance sheet” and in this process realizing favorable outcomes for all your stakeholders.
Having been in the thick of this ecosystem, both in operational and advisory roles, I’ve had the opportunity to observe, introspect, and learn from numerous scenarios and from many industry luminaries. All this has led me to believe that ideal scaling involves the mastery of a few key parameters.
This involves building a state-of-the-art product that can “expand” to support a sudden, say, 10x to 100x increase in your customer base. This typically happens after a massive viral growth event or a very successful B2B initiative.
Technical scaling involves growing your computing and data delivery capacities to sustain these sudden growth spurts to ensure that the end user experience is not degraded at all. It also involves a growth in certain functions (usually support and sales engineering) to absorb a larger number of customers. Serious work also has to be done to maintain security at all levels, especially as fault lines grow along with growth in the customer base.
Offerings like Amazon Web Services (AWS) have made this scaling need dramatically easier if you offer purely cloud-based products/services. But there are startups where deployments are on premises, where products are installed at a customer site. These startups have to deal with varied combinations of operating systems, databases, browsers, etc.
Repeatable sales cycle
I wrote about this in a previous article, but this dynamic is so important for enterprise startups that it requires, at a minimum, a quick summary.
To be a successful B2B startup, you should master the resources, time, and personnel required to consummate a sales transaction and articulate it with both confidence and finesse to internal and external stakeholders. If you are ready to scale, you should be ready to sell, crisply and regularly articulate what you are good at, and easily convince decision makers about this.
Without these qualities, your startup may grow haphazardly, eventually leaving money on the table, having significant customer or employee churn, and seeing finances go out of whack.
In concert with growth in sales/users/usage, your startup has to grow to be aligned with the needs and aspirations of your customer base. Typically, some growth happens before scaling. Indeed, it is this growth that perpetuates scaling.
For example, growth in sales and marketing teams usually happens just before or in lockstep with growth surges. Growth in other groups are also “trailing indicators” of startup success, as it addresses the needs of a larger customer base. These groups are typically support groups that are scaled in tandem with, or just after, significant growth.
This is arguably the most important factor of them all. It encapsulates the following abilities:
Thinking and executing “big”
Hiring (easily and selectively) enough people to address a suddenly growing and ripe market
Inculcating and imbuing the company’s DNA and credo into each new hire while still leveraging a varied, eclectic skillset
Articulating growth visions into keynote sessions
Startups that achieve this mindset growth frequently get strong industry mindshare, a development that has a positive snowball effect on growth.
Organizations that achieve all, or at least the majority of, the above are the ones that scale magnificently. They’re the ones that flawlessly cross the metaphorical and onerous chasm. These organizations skillfully set up powerful beachheads early on in growth cycles and then leverage these to successfully traverse J-curves (and other growth metaphors) to become unicorns. These are the ones that master the art of scaling, and in the process add great luster to the startup industry globally.
Devang is a TIA Star Contributor and publishes high-value content that serves the Asian tech community.
First Published On: https://www.techinasia.com/talk/master-4-factors-scale-success