Scale is about shattering glass ceilings but may not be for everyone
Scaling to impress others or investors is the worst decision you will make
Many Indian states overshoot the population of nations of a comparable size by about eight to 10 times. India is definitely a market of numbers and a wonderland of opportunities. But even in India, ever so often businesses hit a glass ceiling and at that crucial moment they can either shatter through it or fall sideways on impact.
Scale is a seductive word. Investors, employees, markets and almost everyone around you would love to hear it. But is that a good reason to chase it? And what do you do to ensure that when you hit that glass ceiling you smash through, not once but again and again?
Every founder has a vision of the scale that she or he is trying to take the business to. But there are so many pegs on that yardstick, that one could aim for boutique, mass-market and anything in between.They are all good. It’s what you are most comfortable with. Remember scaling to impress others or investors is the worst decision you will make. Do it for the right reasons, always.
Let’s talk about scaling a business to its highest peak. First, scale is not for everyone. It comes at a price and a risk. At every conjecture, as a founder you need to ask yourself: is this something you’re cut out for? And if yes, are you the right person for it? Because, when you fail at scale, you fail big. One wrong move and just like in a game of Snakes and Ladders, suddenly from 99 you could be down to a four.
Secondly, are you ready to relinquish management control if needed and bring in professionals who have experience with scaling? For example, you hire a COO (chief operating officer), but if you expect him to operate in an advisory role, you’ll be in for conflict. To scale, it is important to share the decision-making role.
Third, is your team competent enough to handle scale. Usually, when a business starts growing rapidly, the entire initial team could probably become redundant in two-three years of time because their competencies no longer match the demands of the business. After all, everyone cannot breathe at 10,000 ft and still trek up. So you will need to continually rebuild a major part of your team and that’s most important.
Lastly, you cannot scale your business unless the market size is large and you need to be a market maker and that involves higher risk, bold decisions and patience to hold on till you succeed.
As Kunal Bahl of Snapdeal observes, “Staying focused helps solve problems that the impatient or the less observant won’t do. The attention to detail creates genuine solutions, which cannot be achieved by throwing money at all problems or by hopping to different markets."
The best entrepreneurs look at exponential growth by creating a demand that does not exist today. However, market making will not happen over a marketing communication or a promotional blitzkrieg. As a marketer you’ll need to have ten different things up your sleeve to create a market and then scale it up. You’ll need to create a product that the consumer may not know she really wants or needs but one she will buy at a right price.
Radhika Aggarwal, co founder of Shopclues summarizes this, “Unfortunately glass ceiling exists. Not only in India but globally. One needs to improvise continuously, be it creating new products, new avenues to reach the market, penetrate deeper etc."
On the other end of the spectrum are businesses that choose to remain boutique.
That’s great too, because scale alone is not mandatory for creating value. Luxury brands are not for everyone and yet they are valuable businesses. To be a successful boutique brand, your differentiation and consumer targeting has to be sharp and your repeat customer base has to be massive. In that case, you could still be more valuable than a mass-market business.
To everyone contemplating the size of the business they should aim for, first understand the market that you’re in and get a sense of the size of the market. Understand your own priorities and strategise with that in mind. True scale comes from opening a new market, which involves not just offering a product and talking about it, but creating a demand and solving all the problems associated with the adoption of your product. Ingenuity is the real difference between success and failure.
Entrepreneur 4.0 is a column where successful Indian entrepreneurs discuss various aspects of startups.
Ronnie Screwvala is a first generation entrepreneur and chairman and co-founder of upGrad, an online educational platform.
FIRST PUBLISHED27.03.2019 | 10:45 PM IST