Like many people, I have enjoy Reid Hoffman’s Masters of Scale podcast. It’s one of the best produced podcasts around and with an inimitable number of guests. The stories and interviews include great perspectives on inspiration, competition, growth and not only how to scale.
It’s remarkable how easy it is to conflate scale and growth. We use both words quite casually in business and it’s common to see them used interchangeably. However, there is a massive difference. Failure to recognize the difference can be expensive.
Growth is about getting bigger. Scale is about being stronger.
Growth is about customer acquisition. It’s about channels and conversion funnels and the things that are fairly easy to measure and often the key to impressing investors and journalists. Growth is very metrics oriented and data wins arguments [usually!].
Scale on the other hand is a not qualitative, but definitely less easy to measure. Scale is about capabilities, policies, systems and processes. It is not just about adding headcount. Compliance, risk, food safety or HR policies are not only solved by throwing bodies at the problem area. If we hire 100 people tomorrow to work on our biggest problem where we have one now, we won’t get it done in 100th of the time. However, if we can ask why that problem or obstacle exists then we have the chance to add technologies or invest in more infrastructure, etc. Scaling is hard, because it is a confluence of things that are often required. Moreover, scale is usually added in a step function way while growth is exponential (usually an S curve of sorts).
Caveat: You want to sometimes do things that don’t scale, because there are great returns to exceptional customer service or personalized insights, but these are the exception. The majority of activities need to be scalable and technology stack needs to be able to power them.
Scale quick!
Founders who aim for high MAUs and low CACs at the expense of building a nimble organization that is ready for the next stage of growth will find they have high churn, bad customer experiences, and false positives in the feedback that they are getting from the market. An MVP and customer testing requires getting feedback on features as well as feedback on how you deliver the service and whether the organization can scale operationally to do so.
Once you have product market fit, recognize the difference between scale and growth.
What has your experience been with scaling a new venture? Does it get in the way of growth or help?
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