One may think that there is a formula to scale a startup. One may think everyone knows all the variables and constants of those equations. Building a startup is an art form. Like any other art form, one cannot spell creativity with a fixed set of letters or confine it into borders or pages.
In essence, I say that building a startup is a creative process. There are rules – a palate of colours, brushes, and then types of strokes. But what a painter does with the material and what defines his process is entirely different.
But once an artist completes his work, it may or may not yield the same value as a painting by Picasso or MF Hussain.
Components of a Business Artefact – Price Tag of Values?
What creates value? The artist, his painting, or how people perceive the artefact? Sadly, there is no one answer. It is not valid for scaling startups, even. Every entrepreneur is different; every startup is different, and every startup scale story is different.
We have heard these stories on various episodes of Maharajas of Scale and now is the time to deep dive further into understanding how these companies gathered their first 1000 customers.
I have spent an immense amount of time with startups and founders. Whether it is mentoring startups, working with communities, or interviewing different startup founders, the result is the same. I find it difficult to infer a fixed set of guidelines that work for all. There is no single pane of glass to create a cookie-cutter that establishes the scale strategy. To add to it, the intention of ‘scale’ differs from startup to startup.
If every startup is different, then do we need to understand or learn about growth strategies?
Startups – We are all made of the same startup atoms
To simply illustrate, every startup needs to design, pick the material, and wield its cookie-cutter. Every startup needs to write their own scale narrative but also learn the atypical methods in which other startups have scaled.
Like Richie Norton says, “In the end, every startup is different. But in the beginning, every startup is the same.”
Every startup is the same because it takes a lot of sweat, blood, and tears to gather the initial set of customers – the paying customers. The initial set of customers who are eager to make a bet on a nascent and naïve business. The initial set of customers who are ready to be a part of the startup’s journey.
Analysis of a Domino Effect Design – What is a Business Domino?
Take a row of dominos placed closeby and upright from each other. A push to the first domino leads to the fall of the remaining ones. A startup is like the row of dominos—each of domino representing the product, customer, stakeholders, pricing, employees, milestones, etc. If we think scaling equates to the domino effect chain, then the initial design becomes essential. How do we place the dominos? What should the dominos be? What should be the location of dominos that external factors don’t affect the perfect fall?
And finally, when and how should the initial push gather enough momentum?
Every startup needs to define their dominos strategy. It is the first step before we need to push the first domino of a startup journey.
A startup’s journey begins with an idea or a problem. Founders come together. A team raises some investment and works with innovation and creative thought process. Maybe some luck and opportunity timing helps. But for it to grow, the startup requires innovative growth strategies.
Though every startup picks its path to scale, there are a few commonalities that have been an integral part of the business. You could call these as a formula to scale a startup. These general best practices can help startups with their initial know-how. The startups can then pave a more flowery path to growth.
Elements of a Business Cookie-Cutter: How does one look at growth in startups?
To understand growth factors or the practices used by companies, we need to pigeonhole businesses. What works for a B2B (Business-to-Business) startup differs from the approach of a B2C (Business-to-Consumer) model. More categories and subcategories related to the businesses help with the refinement. The classification comes from the product, the target segment, and the business model.
Division based on Industries
Products created for a specific industry or targeted to a particular industry fall under this category. To name a few aerospace industries, telecom, FMCG, transport, logistics, computer, etc. Each of the sectors has a distinct way to reach to their customer and their customer needs.
Division based on Technology Domains
I can divide startups into domains like Fin-tech, health-tech, deep-tech, ed-tech and gaming. Every space has its nuances. The product type, and the degree of results needed for different domains, is different. For an ed-tech startup, the quality of the content delivered could help gather more users. However, for a gaming startup, the various digital marketing engagements could help gain new customers.
Division based on Business Models
I can further classify the businesses into distinct business models like subscription, ad-revenue, reseller, freemium. Though business models can change over time, they define the path a company takes. Business models map a way to make more money and the value for which the customers will pay the money.
Division based on Target Market and Segments
I can even look at a distribution based on the target market and segments. Here, the customer persona plays a pivotal role. The geographical location, the behaviour and interests of the customer help in creating an attractive marketing plan. This way, they draw more customers into the startup’s offering.
With the 1K column, I will reflect on the nuances of finding the initial set of customers – Formula to scale a startup. I will try deep-diving into different startups, learning their archetypes and sharing the hacks that can help other founders to find new customers.
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