The Scaling Startup
Here’s your Startup Tip of the Day 🚀
For the majority of new founders I speak with and/or advise, the thought of actually launching a new company is the big ‘thing’ – the culmination of countless hours of work that ends in the launch of a new product, service or experience.
But after 4 startups, I can honestly tell you that launching is the easiest part. But, scaling is really hard.
🚀So what’s scaling exactly? It’s essentially magnifying the model on a larger scale typically by a magnitude of 5x-100x your initial launch market size.
Say you launch an e-commerce store, and reach 5,000 visitors via paid, social and organic traffic, and convert 2%. How would you ‘scale’ that model to reach 25,000-100,000-500,000 visitors?
☝️What often works at launch does not scale well. The customer hand-holding, the deep attention to detail, the never ending customer phone calls, the back and forth with buyers, the list goes on – any element that works at launch in a micro market may not scale if amplified substantially.
🔑So, the key is launching a business with the forethought of “how will this scale gracefully?”, and not “we’ll get to the scaling part later”.
👉Design to scale from the start.
Of course, even if you want to stay small, visualizing the elements that may or may not scale appropriately helps you best prepare even if you never scale any larger.
For startups seeking venture capital, this exercise is vitally important and often is a major deciding factor to what companies get funded and which don’t.
Scaling comes in many forms so it’s best to mock up how each element will play out for your business:
- -Transactionally can we scale?
- -Operationally can we scale?
- -Technologically can we scale?
- -Geographically can we scale?
- -Financially can we scale?
- -Legally can we scale?
- -Psychologically with consumers or business customers, will they allow it to scale?
The more you gain clarity on the right model, market and model, the faster you can scale (and profitably).
Now go scale that mountain!