September 29, 2006

Just ask yourseslf, does this scale?

I just returned from a speaking engagement in Toronto. While in town, I met with a bright young inventor who has a new product going into retail stores in October. Even though he isn't affiliated with any major distributor or manufacturer, he's getting hundreds of thousands of pieces in the stores. How? He spent over a year on the road, meeting with hundreds of store buyers face to face and demonstrating his product. The trade publications are taking notice and predict his product will be a sure success.

Now he's looking to acquire or invent four more products in the next year. And he's going to do it independently like the last time. He asked me for advice ranging from fundraising to quality control. I suggested he perform a self-assessment on his "business processes" that stretch from A-Z. Do they scale? In other words, can he go from a single product in two years to five products in one year selling directly to hundreds of buyers? Or will he quickly dilute his effectiveness, only to become a one hit wonder?

In any business, "does it scale?" is a critical question you need to ask about your services, business processes and habits. What works once may not lead to a big or bigger business. The most successful modern companies are based on processes and technologies that scale. Take MySpace (please). They were able to go from 10,000 to 10 million users with the same platform, although they had to make some expansions. But their business model didn't break down. The idea scaled.

The analogy I use it the camera phone photo. It may look good on your cell phone, but if you stretch it on your computer screen to ten times its size, it will get pixilated and ugly. That is how our business ideas turn out when we don't think about higher demands and ever changing conditions.

Building a business that maintains quality with growth is tricky, but it can be done. Always ask yourself how you can build processes (the heart and soul of a company's worth) that perform the same, even when they play on a bigger stage.

Some people need to stay small and effective. Don't let your ambition be your albatross, unless you are sure you have a scalable idea.

Suggested reading: Seth Godin's brilliant new collection of advice blog entries, Small Is The New Big.

Posted at 4:07 PM in Business Effectiveness  |  Permalink  |  Comments (0)  |  TrackBack (0)

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