Scaling a Business

Scaling a business at speed can feel like an out of control roller-coaster.

Scaling a business at speed can feel like an out of control roller-coaster.

Taavet Hinrikus

Many growing companies get “scaling” completely wrong. Often to their demise.

They think they are getting it right, but they are missing a fundamental piece of the puzzle.

Scaling is not about purchasing new software.

It’s not about hiring new people.

It’s not adding new products.

If you have to spend more money before you get a result, you have it wrong.

That is called either an investment or launching a new line of product.

That is expansion, not scale.

What is scale?

Definition: Increase sales while keeping expenses generally the same.

Let’s say your company sells t-shirts online.

It starts doing well and you feel amazing. You start thinking: how can I make this more successful?

New software, additional ad spend, taking on debt, more people and new product lines start looking really shiny.

This is usually the point at which new entrepreneurs get in trouble.

They start looking for shortcuts. They hear about “Scaling their business” from someone selling them software.

The reality is, if you have a t-shirt company that is achieving some success, you should only be thinking of one thing in regards to scale: distribution.

If you start the store on shopify, let’s say. You should be thinking about getting your brand onto Amazon, Walmart and other online stores. You should be thinking about getting it into stores. You should think internationally. Think trademarks. Think licensing.

Every company is different. The example above is a simple one.

When you have proven initial demand, scaling is when other people and platforms are selling your product for you.

Don’t fall into the shiny new tool trap.

Hire very slow.

Remove your emotions from decisions.