Three Reasons We Fail to Scale
I recently heard a CEO define the challenge of growing beyond innovation to scale as “the proliferation of a thousand tiny flowers that don’t grow bigger over time.” Seemingly great new products get early market traction, but never become significant revenue producers and no one's sure why. The challenge of moving from innovation to scale has confounded tech businesses forever, but could it be that the strengths that brought your innovation to fruition are the very roadblocks you need to break down? Why do we fail to scale? The reasons may not be what you think:
Reason #1: An Innovative Team
This is no mistake. The team who thought up your Next New Thing is invaluable. But – they’re terrible at scale. Innovators work best when unencumbered by process – innovation needs lots of room for experimentation, trial and error and gaining insights one beta customer at a time. It’s controlled chaos.
Scale requires an entirely different skillset. “Scale people” are good at identifying the differentiating value in a beta product that will appeal to a broader market. They’re good at building market awareness and articulating valuable differences with powerful positioning. They implement the processes, structure and standardization necessary to accelerate revenue and drive profit.
Reason #2: Abundant Resources
Again: no mistake. Established organizations often assume what’s working for their current business will work to scale a new product. After all, we have a BAU engineering team. We have brand recognition and a sales team with deep customer relationships. If we drop the new product into that resource stream it will succeed, right?
A startup may have millions in venture funding and be 100% committed to beating the product your teams consider an afterthought.
In fact, current infrastructure enables business Maintenance, not Scale. Too often the needs of these innovative new offerings get pushed to the side because “Flagship Product A brings in most of the revenue today – we need to sell/update/market it.”
I recently read about a startup that received $50 million in second-round funding to scale a product – one that disrupts that of a well-established, global firm. The startup has $50 million to beat this established player that’s likely treating their competing product like an afterthought. You may not be able to focus 100% of your resources on the new thing, but if you're going to put it in the market, you have to play to win.
Reason #3: Loyal Customers
Who doesn’t want loyal customers? But sometimes that loyalty can hinder innovative growth. Loyal customers are invested in your success - with your existing products. This makes them good evaluators of product enhancements, but poor champions of systematized change. If you think this isn’t true, ask yourself how many Innovation-to-Scale projects have been derailed when the opposing needs of “Our Biggest Customer” are invoked during planning meetings.
So – How Can I Scale to Win?
In this hardest season of business growth, the Market Strategist must be the champion and enabler of success. In my next post, I’ll give some ideas to overcome the challenges of Scale.
About the Author
Diane Pierson is the Founder and Principal Market Strategist of Innovate on Purpose, a consultancy enabling successful product innovation for tech companies through strategic focus and powerful go-to-market strategies. Diane is also a visiting instructor at Pragmatic Institute. Contact Diane at firstname.lastname@example.org.