December 16, 2019
How To Scale Up Your Startup For Maximum Growth
Unless you’ve been living under a rock, you’ve probably heard the term ‘scalability’ bandied about the place. It’s one of those buzzwords lots of us talk about, but very few understand what it actually means.
Luckily, wrapping your head around scalability and learning how it can help you grow your startup isn’t as complicated as it sounds. Simply put, scalability is about reducing the costs of each unit of a product or service, while keeping the sale price of each unit constant.
Basic business, right? Reduce costs and sell more stuff to increase profits.
Scalability is nothing new. So, what’s all the fuss about, and why is it so important for my startup?
We take a deep dive into this hotly debated topic to find out why cracking the code to scalability can unlock a world of opportunity.
The Three Pillars of Scalability
We’ve identified three key areas to scale your startup. Unlock the power of professional peer-to-peer networking platforms to attract seed funding and send your business valuation into the stratosphere.
Scaling your startup involves streamlining your existing processes to reduce production costs, improve distribution channels, build better systems, and access a wide support network of experts.
Lowering production costs is the ultimate driver to scalability. Some businesses are more scalable than others, depending on the products or services they offer.
If you make bespoke handcrafted chairs, the cost of production for each chair is fairly similar whether you build one chair or one-hundred. Economies of scale will slightly reduce material costs, but ultimately, each unit requires the same amount of labour and material. This isn’t a scalable business.
If you sell software, the cost of reproducing a computer programme is almost zero. Once you’ve invested in the development of your product, you can sell it again and again at virtually no additional cost. This is a highly scalable business as the cost per unit reduces as you sell more units.
Scaling production with business networking platforms
Unlocking scalability in production can give your startup wings. Peer-to-peer business networking platforms give you access to a powerful community of innovators who can inspire unique ideas and tips for undercutting market leaders with cunning business models.
Scaling production is all about finding creative solutions to problems that cost you money.
Whether it’s watching videos to learn from industry experts, or asking your trusted network for advice, networking platforms help to share knowledge and learn from others.
Minimum Viable Product
The beauty of a strong professional network is the access it gives you to experts who understand what it means to start a company.
Releasing a product to the mass market requires huge amounts of investment which you might not have. If you can’t prove your product or service works, why would someone invest?
A useful solution is to produce the most basic version of your product. We call this a Minimum Viable Product (MVP).
MVPs should still serve your core business function, but it doesn’t need to be perfect. Use MVPs to test your business with an audience who understand the challenges of launching a new product or service.
Be honest about what your business can offer and share your vision with your professional network to get them talking — welcome feedback and ideas to help you make iterative improvements which attract investment.
Eric Ries’ Lean Startup is worth a read if you want to learn more about how MVPs can take your business from zero to one hundred in the blink of an eye.
“How can I reduce distribution costs?” is the million-dollar question for almost all startups.
Shipping physical products to customers’ doors or contracting technicians to install software are both unwanted costs. Reducing distribution costs gives businesses the agility they need to widen their customer reach, increase sales, and scale their startup to new heights.
For businesses that rely on distributing physical products or raw materials, building strong professional networks can open doors to collaborative distribution services to achieve economies of scale.
Successful startups will keep both eyes peeled on their wider professional network. It’s important to track who’s doing what and stay ahead of the game by outperforming your competition with streamlined processes and improved user experiences.
Scaling distribution with peer-to-peer networking
If you use business networking platforms, scalable distribution channels are sat right under your nose.
Reach out to your network to discover the all-important ‘early adopters’ who can get your startup off the ground. These are the people who like to be kept in the loop with the latest innovations.
28% of Americans are ‘strong’ early adopters of technology who take to networking platforms to discover exciting companies that are disrupting traditional businesses.
Serial entrepreneur, John Rampton, explains that getting your first customers through the door is the hardest part of starting any business. Shout about your startup from the rooftops to spread the word and find fellow entrepreneurs who want to support your venture.
Once you have a small group of core customers, ensure to get feedback and address any concerns. Don’t try to expand quickly, offer discounts or extract testimonials – stay focused on your customers’ needs and improve your business/product first. Growth will come in good time.
3. Infrastructure & Teams
Even the most scalable startups struggle to build profitable business models. Tech-focused businesses require huge amounts of seed capital investment in the early days to build sophisticated platforms.
Whether it’s app development, blockchain design, customer relationship management (CRM) systems, or e-Commerce sites, many modern startups require upfront investment that can eat away at profits.
An excellent example of this is Uber. Despite its $50 billion valuation, the ride-hailing giant is yet to turn a profit since hitting the world’s streets in 2009. In 2018 alone, uber reported a terrifying loss of $3 billion.
So, why do companies like Uber have such sky-high valuations if they aren’t making any money?
The answer: their unique tech infrastructure and teams of talented people who believe in a shared vision. This powerful combination attracts investors who spot potential for company growth and disrupting the market.
“Surround yourself with smart, dedicated people – to build something isn’t a one-man show. It’s more important to have smart people who really believe in what you’re doing than really experienced people who may not share your dream.”
Attracting the right people to your business and building cutting edge systems is essential for scalability. Discover business networking platforms to broadcast your startup with a focused audience of industry professionals and tap into the best knowledge talent.
Leadership & empowerment
For any startup to be successful leadership strength is essential. For small scale-ups though, this needs to be developed over a period of intense pressure and growth. Staying focused on the vision and giving guidance or solving issues is the day to day norm. Maintaining strong values and building an aligned team is crucial for every leader so they can empower their team and give them the freedom to innovate.
Core technologies will be central to developing strong processes, aiding scalability, and keeping costs down.
Every failure is new knowledge gained
Today’s fast-paced and technology-driven environment means starting a business has never been more exciting.
A new business venture is likely to create a roll-coaster of emotions so it is essential to be aware that your ‘ability to wear every hat’ is essential in the start-up phase and should help you define a strong team of co-workers tomorrow.
Learning how to be a good leader is as important and building a great product. Finding your knowledge experts and supporters will soothe some of your troubles at the end of the day, it will be your resilience and ability to grow that will shape the company’s future.