smart scaling - a go-to-market strategy framework for bootstrapped b2b startups (short version)
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Scaling SmartA Strategy Framework for Modeling, Managing
and Monetizing the Scaling of Bootstrapped High-Performance Ventures
Davender GuptaThe Scaleup Projectdavender@davender.com514-448-1894
©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com1
Scaling is important…
A high-performance startuphas no value unless it gets out of development mode and engages with the market
But is hockeystickgrowth the only
strategy?
2©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
Failure To Launch?
Ideal VC-backed Scaleup(Hockeystick)
Failed Scaleup(Valley of Death)
Time
Success Metric(Valuation,Revenues orTraffic)
3©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
The problem with the hockeystickscaling strategy
« Unicorn Dreams »
• Distracted by Traction
Premature Scaling
• Insufficient evidence of PSF and PMF
Unworkable Business Model
• No path to profitability
Ability to execute lags demand
• Quality and customer service fails
4©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
Tech scales quickly.People don’t.
5©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
STARTUP
SCALEUP
BUSINESS
6©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
Exploring a viable business model
Developing credibility in the marketand the ability to execute
Executing and evolving the business model
Successful scaling requires maximizing execution while managing uncertainty
7©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
Strategy Is A Pattern of Choices
• How your choices align with vision, mission, values
Suitable
• How your choices fit success and risk criteria
Acceptable
• How your choices can be executed with available resources
Feasible
• How you co-create choices through interaction with stakeholders
Effectual
8©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
Causal vs Effectual Choices
• Causal = Assumes the future is knowable and known
• Effectual = Assumes the future is unknowable and unknown
9
goal
means
Search for the meansto achieve a stated goal
Start with the meansat hand to design the
outcome
©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
Principles of Effectual Strategy
10
What can you do with what you have, what you know and who you are
Focus on how to minimize possible losses
Collaborate with partners who provide pre-commitment
Surprises are opportunities to explore new possibilities
The future cannot be predicted but you can control some determining factors
©2017 Davender Gupta. All rights reserved. 171114 V7-LSC davender@davender.com
Source: www.effectuation.org
Impact of Effectual Approach to Scaling
11
Delay seeking investors to fund initial go-to-market
• because the need to generate ROI locks into a causal mindset
First find customers who are willing to collaborate
• pre-production prototype development through co-investment
Establish rapid build-measure-learn loops to find PJF
• find most valuable “PJF” Product-”Jobs-To-Be-Done” Fit
©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
Momentum Scaling
Ideal VC-backed Startup (Hockeystick)
Momentum Scaling (Waves)
Failed VC-backed Startup (Valley of Death)
Time
Success Metric(Valuation,Revenues orTraffic)
H1
H2
H3
12©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
13
Momentum Scaling
•Establish market influence
•Establish market credibility
•Establish ability to executeH1
H2
H3
©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
The Startup Lifecycle Wave
14©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
Execution is the ability to generatemanage and direct growth
15©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
• To build a sustainable, long term business with the ability to become a gazelle
• Founder Team stays in control
• Keep options open
• Choose the best customers
• Better adapted to Canadian (outside SV) context
17
Benefits of Momentum Scaling
©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
18
Move Smart and Build Things
Tech scales quickly. People don’t.
Revenues before valuation.
Managing uncertainty is more important than taking on risk.
©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
Be patient for growth and impatient for profits.
- Clayton Christensen author of “The Innovator’s Dilemma”
19©2017 Davender Gupta. All rights reserved. 171116-v8 davender@davender.com
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