Scale Or Die

You have no choice: it’s either scale or die.

Charles Baden-Fuller and Ian MacMillan wrote skillfully on the matter in the Harvard Business Review: “Many ventures fail to capitalize on successful prototypes because they make one strategic error: they do not understand scale-up. And failing to scale swiftly can be the difference between life and death of a product or company in a fast-moving world.”

At what point is it right to scale? The easy answer is: as soon as possible. But too fast can have long-term implications. There are a few things you need to do before scaling. Product-Market fit comes first, starting with your product discovery, followed by product and market validation, after which you test and improve the efficiency of your product within your market. Then and only after then, you can scale.  Once you scale, you have a whole different set of pains that revolve around creating a scalable and repeatable business model.

A great example of a company that scaled right is Akamai, a company that had a big idea – accelerate and manage Internet traffic on a global scale – but tested it first in a lab setting with no funding. After discovery and validation, the Akamai team went ahead and commercialized the product, reaching Product-Market fit within a year, with revenue of $4 million in their first year, then $90 million the second year. As a result of the quick growth, the company had to scale fast. Costly mistakes were made, but ultimately Akamai was able to overcome them. In addition, Akamai had to scale its product – from one product to a platform. Akamai had a strong enough product development process that allowed them to successfully scale their product offering to a line of products.

You may only be validating your product’s value proposition. Or you may be in early discovery. But you should already be thinking about what it would mean to scale. Your 10 existing pilot customers will have to be thousands or tens of thousands or millions one day. You have the power to create the right kind of business structure that can take you places – take you towards scaling up.

A few things to keep you in the right mindset of scaling – even if you’re not there yet:

• Realize that customers are not the same as users
• Recognize that first users are not the same as scaling users
• Anticipate that first products are not the same as scaling products

The evolution of your product also means the evolution of customers and users. Be mindful of your next steps and ensure that they take you where you want to go – towards scale.
Do you have any tips on successfully scaling your business?