Scaling and building a sustainable business

Tiina Apilo @TiinaApilo

Scaling_p

” We have two components of the scaling part. One is to get your customers and to get a lot of them…that’s another part of scaling too, to make sure that these processes work well.”

Scaling is the moment of truth, regardless of how much the solution, markets and business model have been tested – both together and separately – during the earlier phases of new business model acceleration. This is when you find out whether the initial business model is the kind that will enable your markets to grow and your business to take off. Scaling will reveal any flaws in your business model that remained hidden on a smaller scale. For example, surprises can occur in the form of hosting costs for IT services, or the amount of online service needed, i.e., wherever advantages of scale were not exploited. Furthermore, in such non-scaled models, the delivery of a single, scaled up solution requires the same level of resources as sole delivery.

“We wouldn’t be able to scale up by ourselves. Ecosystem partners play a critical role for us.”

In small startups or companies in particular, it can be far from easy to grow internal resources while also developing processes and systems to serve a growing business and engaging in marketing and sales efforts. It is not enough to get your own business functions in order, your networks also need to be adjusted to match the pace of scaling.

Many kinds of marketing

“Each and every new customer is highly appreciated and we are ready to pay for this, to pay for marketing. Let’s use growth hacking to achieve this.”

According to the new business acceleration experiences of Accelerate project companies, the difference between the Product-Market fit and Scaling phase lies in marketing investments and techniques in particular. Whereas the focus during the Product-Market fit phase was on word-of-mouth marketing techniques, during the scaling stage more traditional marketing methods, such as paid advertising, were used alongside growth hacking, especially in large companies.

Sustainable business

”Sustainable business is the motor that will pull many others forward.”

A new business acceleration model involves development through iterative, fast experiments. You have an initial business model as a result of the Product-Market fit phase. During the Scaling phase, the business model should be structured in a way that enables a profitable and sustainable business (see the table).

Matrix_scaling

 By sustainable business I mean a situation in which, after the Scaling phase, your company has created the basis for a profitable business and for accelerating new business ideas or, if necessary, accelerating the journey of the same business to a new level.  The Scaling stage is not, therefore, only about seeking explosive growth rates; it is also about envisioning how you will make money and create channels, networks and brands for developing your next new business ideas. I used the arrow in the phase diagram to depict the results, and the feed-ins for the next round, from each acceleration cycle.

 

We developed a new business acceleration model via the Accelerate project. Previous publications on the model include How to accelerate the development of new business activities?, Without problems there are no solutionsProblem-solution fit and Finding a value proposition.

The quotes are comments from companies, given in validation interviews for the Accelerate model, on their own business acceleration stories.

One thought on “Scaling and building a sustainable business

  1. Pingback: EFFECTS OF ETHNIC NATIONALISM ON INTERNAL SECURITY IN THE NIGER DELTA REGION (1999-2014) » PROJECT GIST INTERNATIONAL

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