To scale or not to scale. That is the question that preoccupies the hearts and minds of entrepreneurs. OK, we stole that bit from Shakespeare. If you're gonna steal, steal from the best. But it's a crucial question that many startups must ask themselves when they've achieved product-market fit. And it can be a daunting decision.
At its simplest, this is a numbers game. Can the business support the growth of your customer base? But there are other moving parts to consider. After all, as Jeff Bussgang of Flybridge Capital Partners points out, scaling is hard. Jeff says that you have a lot of moving parts to consider. Should your product strategy stay focused or should it be broader? Raise more capital or exit? Bring on more experienced folks to oversee the scaling, like a new CEO?
We'd add another question to that: are you ready to scale at all? Sure, you may have found people who want to pay for your product and you've assembled a product team worthy of the Avengers. You have to be ready to operate at scale, both financially and structurally, as Thumbtack Co-Founder Sander Daniels writes in this Quora discussion. As he states:
Scaling is very difficult and takes much more than being written about in TechCrunch. There are lots of large, entrenched players trying to stop your innovation. Of all the non-glamorous things it takes to create a real company out of a startup, scaling is the least glamorous.
In other words, are you fully prepared to meet the challenges of scaling? Scale too soon and your startup could go bust. Consider this, 70% of startups fail because of premature scaling.
That being said, startups shouldn't dwell too much on scaling until they're ready to cross that particular rubicon. Or as Airbnb CEO Brian Chesky recently said:
Do things that don't scale. We start with the perfect experience and then work backward.
Consider Your Product First, Even When Scaling
What you should consider first and foremost is your product. Which is what Airbnb did when it started in the living room of Joe Gebbia's San Francisco apartment, renting out a few airbeds to attendees of a design conference. Even when you're ready to scale, or are scaling, you should still focus on your product, testing ideas and iterating. Like Airbnb, which is worldwide and now valued at more than $1 billion, having raised $220 million in funding.
As Fast Company points out, Joe's original apartment is still a testbed for new ideas. But you don't have to take our word for it.
This Friday, Oct. 26, Joe will be stopping by ZURB HQ to get on his soapbox to tell us how Airbnb successfully scaled from his living room to an international sensation. He'll also talk about the challenges in scaling over the years.
RSVP now for Joe Gebbia's ZURBsoapbox, Seats Are Limited
55 North 3rd Street
Campbell, CA 95008
Friday, Oct. 26, 2012
from 12:00-1:00 PM