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We could write a whole book on this. If you're VC backed and aiming to grow the usual 10x-20x per year, you'll end up changing everything drastically all the ti

by muzani 2y ago

We could write a whole book on this. If you're VC backed and aiming to grow the usual 10x-20x per year, you'll end up changing everything drastically all the time. You end up with a different company every 6-18 months. I've had 5 direct manager switches on the last 3 years. The more complex your business, the more painful these reorgs will be. Scaling isn't usually about making numbers grow. It's about complexity. Complexity goes up exponentially with verticals you're in. Every product has its own user channels. You sell the same thing in Phillipines and you need to use Viber. You go to Colombia and you need to cater to some specific Colombian law. One vertical across different countries is hard enough. Once you start hiring people, you need to keep them. Ideally a person manages 5-7 people, after which they stop being a manager and become an observer. More people mean more managers. How are you tracking public holidays across countries? How are you handling internal comms? Tax? Legally mandated hiring laws? How are you scaling HR for this? If you mix B2B and B2C, these are usually completely different engines. B2B may focus on sales and demand gen, B2C would be marketing and branding/positioning. You double the headcount but halve the leader's focus. Companies like Google scale because they keep to a few verticals e.g. search and ads. WhatsApp and YouTube had massive enviable exits with few staff because they didn't really bother figuring out the business model, they just scaled it up incomplete and unstable. If I had a tip, I'd say don't do it unless the gains are also exponential or necessary. You're either building towards economy of scale (lower unit price), economy of scope (lower marketing cost), or innovation (speed of product). An additional product should play into one of the above. Sometimes it is necessary, e.g. if you're Google and you can't get acquired, you have to build ads.

hayst4ck 2y ago
> You're either building towards economy of scale (lower unit price), economy of scope (lower marketing cost), or innovation (speed of product). Did you come up with this or did you read it somewhere?
- muzani 2y ago
  Nearly everything there is in a book somewhere but verified with experience. This bit was from Harvard Business Review. I believe it inspired the Business Model Canvas. I first got it from an entrepreneurship course in ~2014. I believe the source may be early 00s if not 90s. It's hard to find sources from that far back, do share if you can find the article. Lean Canvas is more popular these days, but if you know how business models 'click', you can use the BMC more effectively. Massage them into these forms. It's less useful for startups finding a business model, more for startups making the transition to scale ups.

by muzani 2y ago

hayst4ck 2y ago

> You're either building towards economy of scale (lower unit price), economy of scope (lower marketing cost), or innovation (speed of product). Did you come up with this or did you read it somewhere?

muzani 2y ago
Nearly everything there is in a book somewhere but verified with experience. This bit was from Harvard Business Review. I believe it inspired the Business Model Canvas. I first got it from an entrepreneurship course in ~2014. I believe the source may be early 00s if not 90s. It's hard to find sources from that far back, do share if you can find the article. Lean Canvas is more popular these days, but if you know how business models 'click', you can use the BMC more effectively. Massage them into these forms. It's less useful for startups finding a business model, more for startups making the transition to scale ups.