Avoiding the 3 worst pitfalls
Scaling up has become the magic pill that every startup seeks. Yet the definition of what scaling looks like varies.
While some people associate scaling with equity backing, enabling scaling to be rocket-fuelled, others use it to describe any business growth.
Many see scaling as the road to riches, a dream to create the next unicorn, and becoming millionaires in just a few years.
The reality is that few succeed.
To be successful, the growth must be both sustainable and profitable, two minor details many companies miss.
Failing is never an attractive prospect. Failing fast may mean your beloved idea has barely gotten off the ground despite securing early financial backing.
Failing slowly is a protracted demise that may mean substantial amounts of your own cash being used up, not to mention your health and happiness for several years.
Far better to understand the pitfalls of sustainable scaling and avoid both prospects.
When we start businesses, many entrepreneurs are still exploring product-market fit.
I was typical in this, willing to sell anything to anyone, adapt what we did, disregarding profitability if it meant we got a sale.
To scale up, this has to have stopped.
“My number one predictor of whether or not a company will find product-market fit” — Naval Ravikant
You need someone on your team with an outstanding grasp of marketing strategy, including a deep understanding of differentiation, value proposition, segmentation, prospect knowledge, and cost of acquisition.
Till you have that, it is fool-hardy to consider a major growth spurt.
The flailing around, selling anything to anyone, will continue. Marketing costs will be huge and the return minuscule. Achieving profitability will take a long time and, if achieved at…