Vijay Anand | The Startup Guy.

Build. Build to Scale.

Posted on: September 11, 2007

I came across a post by Alok Mittal in the NASSCOM blog, where he strongly urges entrepreneurs and companies to think of their offerings in terms of scalability.

He does share a fair bit of my thoughts as to what the roadblocks are. It’s a short, sweet and good read.

I do love the closing notes:

Entrepreneurship is all about creative problem solving. Scaling is all about leadership and managing change. The combination of the two is what creates truly great companies.

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5 Responses to "Build. Build to Scale."

Can’t say I agree with that. VCs have a 4 step model

a) Invest
b) Scale
c) Exit (< 5 years)
d) Profit?

So its no surprise to see Alok say that companies should scale because thats his business model and what is best for his company.

If you are a YouTube and you need to corner the market in the next 12 months, then it makes sense, but otherwise scaling is the very last thing that anyone should think about. First figure out something that can make you some money.

Check out see the number of companies that try to scale without having any revenues or business model at all. Once all that is sorted out and people are paying you money, then is a good time to figure out growth and scaling.

Good point Sid,

I am going through exactly the same cycle right now and cant agree more with you. The challenge always is to keep the home fire burning as that helps sustain plus it gives you that confidence and knowledge of what customers think about you. It is only after you are confident at that level, then scaling makes sense.

If you are an entrepreneur and believe in your idea, spend the first few years building a customer base and a suitable volume turnover rather than running behind VCs, as they simply dont exist.

Well, I would say that if you are talking to a VC, then you *must* be in a position where your business model, pricing strategy, alliances, and product development is complete, and roadmap set.

And yep, I do agree.. this is written from a VC perspective – but there is truth to it, if you are planning to massively grow – which is ideally the kind of companies that investors are looking for.

I’m wondering what kind of pricing strategy, alliances and roadmap did the Youtube founders have when they started off. I think it was all about creating something unique and not overly worrying about all the operational details.

I’d make two points Chummar.

1. Youtube was a strange and out of the trend experience. Things like that don’t happen everyday.

2. It rarely ever happens in other sectors. I am also talking about businesses outside of the web, where freaky things like crazy valuations dont usually have much of a say. And yep, for the record, there is “business” outside the web.

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