When startup ends, scaling can begin

Posted by Tom LarsenApr 01, 2015 Organization, Planning 0 Comment

I’ve always presumed that any business can scale. I always presumed that any business owner would want their business to scale. In the February edition of Fast Company, there was an article from a forthcoming book by David Butler and Linda Tischler called Design to Grow: How Coca-Cola Learned to Combine Scale and Agility in which the authors make a case that there has been a false hope focus on starting a business and that the future of startups would be improved greatly if the focus were on scaling a business. As a business that is continually working toward scaling for our clients, I was particularly intrigued with how the authors have been able to distinguish between the start up phase of a business and the scaling phase, particularly the stark contrast in perspective needed in each phase.

Having done both and not realized we were doing it, I never appreciated that startup and scale do not sync.  Here’s the compelling excerpt from the article:

  • Starting is all about agility. When you’re starting, you’re developing assets (your IP, your product, your brand, your retail relationships).
  • Scaling is all about leveraging your assets to get the most value out of them.
  • Starting requires lots of exploration and rapid iteration to get to your business model.
  • Scaling is all about standardizing and executing your business model so that you can take advantage of network effects.
  • Starting is all about being ready to pivot when you need to—the whole team must be ready to rethink everything if things aren’t working.
  • Scaling is all about planning—developing a core competency in planning is critical.
  • Finally, starting is all about staying lean: moving very fast while doing the most with the least amount of resources. All startups start with constrained resources, so this is almost intuitive. But big companies think big—they think in millions and years and functions, not in hundreds and weeks and individuals.

Whichever phase you are in, the future of your business is up to the choice you make between your willingness to let go of the attributes of being a startup and embracing the attributes of becoming scalable. Of course, not all businesses must become scalable. Both can be successful. One is personal, the other is scalable.

Forever startup now to me looks almost an artisanal business. It’s the tinkerer and the “always say yes” person. It’s the person who wants to leave options open.

To scale is to say no, we don’t do that. It is to set boundaries. It is to use systems as a framework on which to build a significantly larger business.

Hats off to every one of the half million new startups every month in the U.S.. What a shame that 90% will fail before even getting to this juicy subject. How amazing that most aspire to scale but, will never achieve that because they can’t figure out how to stop being a startup. That’s the allure of being a startup – if you really enjoy it, or you think that is just how it needs to be, you can’t make it to scalability – without help.

I’m looking forward to reading the book. Maybe it will be part of a new marketing campaign for us!

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