In the early stages of founding a startup, there’s a whole ton of stuff that you need to think about. It can be easy to get waylaid by minor concerns and you might begin to lose focus on the bigger objectives. Yes, a nice-looking logo is important. But when you are starting from zero and no one knows who you are, what you stand for, or promise to deliver/produce it matters little.
So let’s take a step back and think about things through a wide-angle lens, looking at the bigger picture. Where should your valuable focus and energy be directed in the early stages of starting up? Should you be getting your product to market as quickly as possible or should you be concentrating on scaling?
What is scaling?
Let us first look at what scaling means before we decide if it is to be our main focus at startup. Put very simply scaling is a process that enables the business to expand rapidly.
Think of any global business. Okay, we can use everyone’s favorite example of Mcdonald’s to see how scaling works. It was Ray Kroc who first started the franchise system the business still uses to this day back in the 1950s. This has enabled Mcdonald’s to expand rapidly and successfully across the world into hundreds of different countries and thousands of locations.
If Ray had attempted to personally oversee the construction, fitting, opening, and running of each new restaurant in the chain he would have been a little tired, to say the least. It would be totally impossible for an individual to keep on top of everything as the business expanded. By creating the franchise system for burger restaurants Ray Croc could empower other people to start and run a copy of an already successful stand-alone business.
McDonald’s is the classic example of scaling, the process that enables a business to expand rapidly with a proven formula and automated systems.
Scaling or launching?
This is the golden question and the answer is very simple. You can’t scale successfully unless you know something works. You can’t know if something works or not unless you have tested or launched it.
You need to know that there is a market and a demand for your product or service. By establishing this early on you can save a lot of wasted time and effort putting systems in place that enable you to scale.
So launching should take priority of scaling when starting up but it is good practice to be thinking about scaling to assess the potential the startup holds. Systems can be built into a startup so that when the time is right you can begin to scale but it must be proven that there is demand first to avoid a massive loss of time and money.
So how do you work out if there is demand for your offering or ideas?
Start local and test
Get your product or service out to the market at the earliest opportunity. That sounds like hard work early on but could be as simple as starting a Facebook page and inviting friends to join to gather some feedback on your ideas. Make sure you reach out to friends of friends and beyond as close friends can be overly supportive just because it’s you and give a distorted source of feedback.
You need to establish as early as possible if there is a demand (market) for what you plan to give the world. Starting locally can be a great way to do this, particularly if you are producing a physical product. Even if your offering is online you can target local cafes, libraries, or anywhere people are likely to have time to absorb some information about your exciting new thing.
Gather feedback, get opinions, have people use your service/product, and get them signed up for future news and updates. Start to build a little testing base of people that are interested and excited by what you have to offer even if it is no more than an idea.
If you really can’t find anyone who shows much interest in the feedback is on the negative side, be sensible and head back to the drawing board. Just be thankful that you’ve saved time, effort, and finances by not perusing your initial startup idea.
When should your startup scale?
It is a tricky question to answer in a one size fits all manor. Every startup will have different requirements and signs that it has reached a point when it can begin to scale. There are some indicators that tech gurus and investors alike would look for in a pre-scaling startup.
Is there sufficient funding in place or available to enable the business to begin scaling? It will take money to actively acquire more customers and expand the operation of the business so it is essential that this capital is in place or accessible beforehand.
Are the systems that work behind the scenes in place and ready for an increase in volume? As an example, you need to have a robust payment processing system that could handle thousands more transactions than it currently does. If any part of an automated process fails you could easily lose customers and fail to successfully scale.
Is there an amazing team in place ready to take the startup to the next level? It’s a tricky balance of timing and skills to get great people on board just when you need them. Hire too early and your wages bill could damage your growth but hire too late and you could struggle to cope with a rapidly growing customer base. It’s essential to have the right skills within your team to enable smooth scaling and avoid knee-jerk decisions.
Is the actual product or service you are going to scale ready for the potential customers? All obvious bugs should have been ironed out through constant testing and iterations to get to a point where the offering is robust enough for a wider market. Any weaknesses will rapidly be exposed with increased volumes and it will be a much bigger task to fix them.