Startups and the scaling Enigma
As I peruse some literature for some insight into the scaling aspect of startups, I constantly encounter the word “disruptive change”! Aggressive words those, which signal a change or a powerful impact, propelled by things, completely beyond ordinary imagination! And startups seem to be doing just that!
Amidst reports, that India is 2nd only to Israel in the number of startups, and is the fastest growing startup ecosystem in the world, with incubation centres, accelerators and the likes, the glaring need of the hour, then, appears to be obvious scaling!!
The imperative, being what it is, for a large country like India, here’s a quick dekko of what this phenomenon is all about. As the word suggests, scaling is growing in volumes, vertically and horizontally, after the startup has been initiated.
Whilst scaling, the key operating word is “flexibility”. Not just being flexible but staying flexible, with respect to the original product and the markets, as the startup moves through the various phases of its growth cycle. The goals too should be long-term rather than short-term, in every aspect.
Two resources, capital and human, are the fuel for startup growth. Human talent and effort, decidedly, seem to have an edge over the other factors. The team benefits with diversity in its ranks. What it could generate, though, in return, is a change in the original culture and the unique vision of the startup. These, then, necessarily, have to be kept consistent, during the process of scaling.
What matters through all these variables, is being able to predict or decide on the time of scaling, as anything premature, when the market is not ready, would unnecessarily lead to a cash burnout. So scaling becomes optimal when the timing is impeccable!
There are mixed views as to whether a disruptive policy should be adopted or a more cautious incremental one, to decide the rate of scaling. It would be ideal to have a balanced approach, as an ill-timed, purely disruptive one, could lead to a disparity between demand and supply, much to the detriment of the company.
Lastly, brand building should also be an all-inclusive long-term effort, rather than a short-term one, and one that is based on end-user satisfaction.
In all this ruckus of when to scale and how much, companies like Aspiring Minds and Facebook are making a tangible effort to support startups in a pretty big way. While the former is scouting to invest in some promising startups, which do not have the wherewithal to scale operations, to support them with finance and marketing and execution of business ideas, FB has tied up with Nasscom to boost the scaling of 10000 startups in India. It will provide a multi-fold support system for finance, technical, marketing and leadership skills, via a program called, “Leaders building for the next billion” to developers and student leaders, who are building innovative apps and mobile websites for new-to-internet users.
A word of caution, though, would be, that, making hay while the sun is shining, is not a bad idea at all, but, one needs to prepare oneself in case a downturn were to happen, by cultivating and nurturing a long-term view of the product.
In conclusion, I would like to believe that, one of the pressing reasons why startups are happening across the world, is not just to rake in the moolah but also to touch the lives of fellow human beings. And unless one decides to consciously paint on the larger canvas of humanity, there will not be any promise of, or, any visible shift, in the status quo, and the larger picture will never emerge!
Inc42 Magazine,. (2015). Facebook Partners With Nasscom To Scale Up Startup Ecosystem In India By 10X Inc42 Magazine. Retrieved 15 December 2015, from http://inc42.com/flash-feed/facebook-nasscom-scale-up-startup-ecosystem-india/
Reporter, B. (2015). Softbank’s Nikesh Arora warns startups of burning money to scale business.Business-standard.com. Retrieved 15 December 2015, from http://www.business-standard.com/article/companies/softbank-s-nikesh-arora-warns-startups-of-burning-money-to-scale-business-115101301325_1.html
The Economic Times,. (2015). Aspiring Minds sets up Rs 6.5 crore fund to invest in startups The Economic Times. Retrieved 15 December 2015, from http://economictimes.indiatimes.com/small-biz/startups/aspiring-minds-sets-up-rs-6-5-crore-fund-to-invest-in-startups/articleshow/49397087.cms
Williams, A., & ?, V. (2015). Scaling Up Strategies for Startups: Dos and Don’ts. iamwire. Retrieved 15 December 2015, from http://www.iamwire.com/2015/10/scaling-strategies-for-startups-dos-and-donts/125215
YourStory.com,. (2015). Indian startups need to scale up, Kiran Mazumdar Shaw says. Retrieved 15 December 2015, from http://yourstory.com/2015/08/kiran-mazumdar-shaw-2/