‘Scalable growth’ has become quite the buzzword in the past few years, but what does it actually mean and what are the possibilities for small to medium size businesses?
Many people think scaling is the same as growing, but there is a bit more to it:
Growth: investment in additional resources produces a proportionate increase in revenue.
Scale: investment in additional resources produces an exponential increase in revenue.
Here is the difference displayed visually:
Scaling & Technology
We hear the word ‘scale’ discussed a lot in the world of technology, particularly software and cloud computing. The reason is that these businesses are able to deliver a product/service to the globe (via the internet) very quickly and at a relatively low cost. They have fewer manual inputs and man hours which means extreme revenue growth is possible with minimal to no upfront investment.
Of course, we do still hear about significant investments being made in these technology companies (i.e. Uber, Airbnb and Netflix), and that is because there is a race to scale the fastest. The investors know that whoever scales the fastest is the most likely to dominate the market.
What does this mean for small local business?
Even if you aren’t determined to build a global tech giant, the principles of scalable growth are still applicable.
In everything you do, consider how ‘scalable’ the activity is. If you aim to double your top line think about how you could do it without a significant increase in costs.
This mindset will ultimately help you to innovate and build a future-proof business model. The reality is, if your business model does not scale, there is another business out there whose does… and this is called disruption (another great buzzword, but that’s for another time).
So, how do I build my service or product for scalable growth?
Sean Ellis is a “Growth Hacking” expert from San Francisco with extensive experience in scalable growth. Look for his video lessons on YouTube, but here’s a quick overview of his strategy, which was integral to the scaling success of Dropbox, Eventbrite, Lookout and more.
Sean’s “Growth Hacking” strategy is broken down into 3 parts:
- Product/Market Fit:
First, you need to know that you have a product that people want.
If your customers would be significantly unsettled or disappointed if you were to pull the pin, you generally know you’re on to something good.
- Stacking the Odds:
Once you know you have a product people want, you need to understand your market (the more you know the better) and streamline delivery of your “must-have” experience.
What to know about your market:
- Who are they?
- Where do they hang out?
- Why is your product/service a must-have?
- How are they using the product/service?
- What are they incentivised by?
- Scalable Growth:
This is the important – and challenging – part. So much is changing so quickly and as a result, you need to always be on your toes. Once parts 1 and 2 are done well, part 3 is heavily reliant on great marketing.
- Stay up to date with marketing channels: online marketing tools are changing from month to month; new features, changing algorithms etc.
- Analyse the use of your product: analysing how your customers use your product will increase your odds of adding useful features – this is how you create things customers did not even realise they wanted!
- Listen to feedback and act: what one customer thinks is likely applicable to thousands of others, so listen to their feedback and act to improve their experience.
- Be agile and sprint: testing new products/services/features should be done quickly, don’t waste months to deliver something that could still end up failing.
Contact us today if you want to get scaling!