smart scaling - a go-to-market strategy framework for bootstrapped b2b startups (short version)

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Scaling Smart A Strategy Framework for Modeling, Managing and Monetizing the Scaling of Bootstrapped High-Performance Ventures Davender Gupta The Scaleup Project [email protected] 514-448-1894 ©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected] 1

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Scaling SmartA Strategy Framework for Modeling, Managing

and Monetizing the Scaling of Bootstrapped High-Performance Ventures

Davender GuptaThe Scaleup [email protected]

©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected]

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 [email protected]

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 [email protected]

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 [email protected]

Tech scales quickly.People don’t.

5©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected]

STARTUP

SCALEUP

BUSINESS

6©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected]

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 [email protected]

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 [email protected]

Causal vs Effectual Choices

• Causal = Assumes the future is knowable and known

• Effectual = Assumes the future is unknowable and unknown

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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 [email protected]

Principles of Effectual Strategy

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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 [email protected]

Source: www.effectuation.org

Impact of Effectual Approach to Scaling

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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 [email protected]

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 [email protected]

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Momentum Scaling

•Establish market influence

•Establish market credibility

•Establish ability to executeH1

H2

H3

©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected]

The Startup Lifecycle Wave

14©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected]

Execution is the ability to generatemanage and direct growth

15©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected]

Strategy Framework

16©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected]

• 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

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Benefits of Momentum Scaling

©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected]

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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 [email protected]

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 [email protected]

Contact me!

Davender GuptaVenture Strategist and Co-FounderThe Scaleup Project

davender.comfacebook.com/coachdavenderlinkedin.com/in/[email protected]

©2017 Davender Gupta. All rights reserved. 171116-v8 [email protected]