Scaling means increasing sales or production without negatively impacting other areas of a business. The process is tricky to navigate, and many start-ups fail as a result of scaling at the wrong time or in the wrong way, while others simply aren’t scalable.
“It’s so important to have a scalable company because you want to make your product as accessible to everyone as possible,” says Aadeel Akhtar, CEO and founder at Psyonic, a company manufacturing the world’s first touch-sensing bionic hand for amputees. “We wanted to make sure that everyone would be able to get access to our bionic hand, whether they're in the US, Asia, South America, or wherever.”
In an interview with Euronews, Akhtar shared his golden rules for scaling up.
1. Create a product the market wants
“One of the biggest issues that start-ups run into when they're trying to scale is that they built something that the market does not want. So, you have a product and you've got all the pieces in place, but then you find out that it's not going to sell, and that's because people don't actually need what you have,” said Akhtar.
Before launching a business, it’s essential to know what the market needs. If your product or service doesn’t solve an existing problem or address an existing need, then your business is destined to fail. To avoid creating something no one wants, invest in market research before investing in any other part of your business.
2. Target beachhead markets
The term ‘beachhead’ derives from a defended position on a beach, from which an attack can be launched, taken from the enemy by landing forces. In business, a beachhead market is a tight market segment of ideal customers for a new product, with adjacent markets of customers interested in similar products or services, which can be targeted later.
Build a beachhead market based on a specific demographic or a subset of customers interested in a similar product by strategically targeting that market at the exclusion of all others. Once your business dominates that market, move on to target the adjacent markets.
3. Don't scale too fast
“Make sure that you go at a pace that’s sustainable for your company,” says Akhtar. “If you have way too many customers, or way too many products out there, and you can't support it all, there’s going to be a huge problem in sustaining that in the future.”
A typical example of a pitfall when a business increases production without increasing staff or streamlining processes is increased employee burnout and turnover. Start-ups are at higher risk of scaling up too soon as they don’t have the benefit of historical data on which to calculate the pace to scale. Furthermore, early adopters of new services or products can create a spike in sales that some start-up owners neglect to take into account.
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