Take a look at this image:
In some ways, this image is the whole essence of business.
In general, you don’t want the word “premature” associated with anything in your life — children, that other thing, or scaling.
Premature scaling is really bad — and usually crashes and burns your business.
But how do you avoid it?
What exactly is premature scaling?
According to The Startup Genome Project, premature scaling happens when entrepreneurs start “focusing on one dimension of the business and advancing it out of sync with the rest of the operation.”
Phrased a different way, as Nathan Furr explains, “most startups are dying and they are dying because they are doing good things but doing them out-of-order.”
Why this all matters, especially on the startup side: Premature scaling is, perhaps, the No. 1 definable cause of a startup’s death. According to some reports, premature scaling occurs in 70 percent of companies and is responsible for the failure of 74 percent of tech startups.
Premature scaling is “too much, too soon”
Usually this takes a few different forms:
- Too much money (you start burning other people’s cash and they won’t be happy unless they’re ultimately going to see 10x more of that cash)
- Too many employees (a lot of startups try this to become an acquisition target, but unless that’s locked and loaded, you just have a mess of competing priorities)
- Too many early adopters (that’s not a market, that’s just curious people)
- Too many business models (this can actually be a good thing, but often is managed poorly; more in the next section)
How do you avoid premature scaling?
You need to focus on the customer and the product first. That’s going to help you understand your product/market fit and your messaging.
As Neil Patel notes here:
Be aware that this doesn’t feel “smart.” Hanging out on the phone all afternoon listening to people complain sounds very unsexy, and quite antithetical to growth. Are you wasting your time? Absolutely not. You’re focusing on the only two things that matter: Your product (being awesome) and your market (being present).
It’s not sexy, but it’s crucial. Customers are ultimately the source of revenue. If you don’t understand your source of revenue, why do you even have a business?
Now, as for the “too many business models” above — it is OK to pivot.
You probably know the examples: Twitter started as a podcast subscription service. Groupon was originally a social activism funding site. Nokia used to be a paper mill. Flickr was originally a RPG. Nintendo used to sell instant rice. And Pinterest entered the startup world as a retail update site.
Businesses do pivot. That’s fine. But the pivot needs to come by defeating premature scaling — which means you need to understand (a) your customers and (b) your product/market fit.
Find that repeatable sales model
You absolutely need a sales process that is understandable and can easily be taught to newbies and repeated by the old guard.
But you can’t find that process until you understand your customer and your product/market fit, because that will drive:
- Where you prospect
- How you approach
- What questions you ask
- How you build relationships
- What the internal advocates care about
- The elements of moving down your funnel
If you are tempted to scale up your existing sales process before you know your customers and where you slot in the market, that’s premature scaling. It’s all a series of logical steps, but you need to move through them in the right order.
Avoid premature scaling: focus on the right stuff in the right order.
What else have you seen about premature scaling and how to avoid/prevent it?