When is the right time to scale? Here’s where entrepreneurs go wrong

21st Mar 2017
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This article is sponsored by Brand Launch Centre

“Before acceleration, it is imperative to determine whether your product or service is ready for launch.” This was the opinion of Sameer Desai, CSO of Brand Launch Centre and Director of Seagull Advertising.

This and other similar guidelines were the takeaways from a recent session organised by YourStory in collaboration with Brand Launch Centre, where entrepreneurs, investors and other stakeholders came together to speak on the topic of startups and scale.

Sameer’s statement stemmed from the fact that when it came to scale, entrepreneurs often misinterpreted their preparation levels in their clamour to ‘scale quickly’.

Interestingly enough, very definition of the word ‘scale’ seemed to be open to different interpretations. While some participants seemed to relate it with expansion and rising numbers, others based it on how close a company comes to making high profits.

Speaking about the importance of preparation before looking to scale, Desai cited the example of three startups- TorkFlavours of My City and Tokri – in order to explain their varying attempts to scale and the subsequent results thereof.

According to him, while Tokri and Torkk wanted to scale before ensuring the sustainability and supply of their respective products, Flavours of My City emerged as a positive example of a company that weighed in all the factors before determining the correct time to scale.

“It is better to run a business aggressively for six months than stretching it out slowly for over six years,” he said. Kansal, who also has experience in running an online tutoring business for future IAS students that broke even three months post launch, advises entrepreneurs to stop tip-toeing and make as many mistakes as possible, until they finally get it right.

But what are these mistakes that entrepreneurs are known to make, when it comes to scale?

According to Desai, it’s their need to be ‘all over the place’. Chandni Jafri, CEO of Mumbai Angels, feels the problem lies in entrepreneurs being ‘investment crazy’. According to Jafri, who is also a startup evangelist and advisor, it’s time that entrepreneurs realise that the real value of scale lies in their ability to create an idea which will be beneficial to the people around them, instead of blindly believing that the investor is the only one they have to win over.

“Investors invest in people, not in an idea. You need to look for investors who are ready to bring bandwidth and time to the table, over money. Money is available plenty in the market,” she said.

Another mistake that entrepreneurs often make is that they wait to be approached by others in light of the value of their products. Bakul Gala, Director of Metigon PR, said that the very science of entrepreneurship entails the need to reach out to the people who will take your idea or company forward, instead of waiting to be called upon.

“As entrepreneurs looking to scale, you need to be ready to communicate, but most importantly you need to be prepared all round,” he said, while speaking about the importance of securing a PR value for the brand or product in particular.

As human beings we are fascinated by numbers. Maybe that’s why many entrepreneurs believe that these numbers are what determine scaling. It is in the lure of increasing these same numbers that entrepreneurs often end up devaluing their own products or services as they don’t take the time to understand how these will sustain in the market. To Desai, it is important to study and understand the customer’s convenience, something which companies like Just Dial and Book My Show that scaled successfully, focussed on.

As an entrepreneur, you need to understand, even at the ideation stage of your startup, how relevant and attractive your product or service is going to be to the people you wish to sell to. Following this, you need to implement all the marketing and technology that can help you strengthen your brand value and sales. Finally, you need to identify the tools necessary to carry out this process and understand what the market is seeking.

It is only when you can truly determine whether you possess the resources to ‘scale’, will you be able to scale the way it’s meant to be.

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