Invest in technology to scale-up your start-up
Technology and the internet are at the centre of all our day to day works. Today an IT Department and IT Budget are equally important as any department or budget allocation in any organization.
To scale-up your start-up, access to information and exponential technology will highly propel this and the best thing about technology is that it helps you simplify your operations at a minimal cost.
This was part of a key take-away from a workshop hosted by Professor Joe Haslam, Associate professor from IE Business School in Madrid, on 27th of November at Nairobi Garage Westlands Office Space on scaling up your start-up.
“Fast-growing scaling companies are neither a startup nor a corporation but a management team that faces important decisions in areas such as purpose, product, process and people. These four hold the key to transitioning from a start-up to a scale-up. As part of the decisions, these companies have technology at the core. Investing in technology forces you to be specific about your business,” said Professor Joe Haslam.
When it comes to technology, there are a couple of popular solutions that can help an organization manage their startup i.e CRM Systems, ERP Systems, Cloud Computing systems and make them scalable however these tools are optional tools and not every startup needs them.
He also added that today there were eight technologies that companies that seek to scale up should look into applying them in their business. These eight include Blockchain, drones, Artificial Intelligence, Internet of Things, 3D Printing, Augmented Reality, Virtual Reality and Robotics.
During the same Workshop, Prof Haslam also added that most start-ups fail and not because they run out of funds but because most managers do not put in place the right business models and strategies and when they do, they tend to complicate them.
He added that for any company that seeks to scale-up a good strategy is quite essential but there’s no need in having a complicated one. He further added that the best business plans or strategies are an insight with a list of experiments and is quite simplified.
‘As a start-up seeking to excel, simplification is quite key. As in nature complexity kills while simplicity scales. Simplification can only be achieved if you put all your efforts in one thing that really works and is core to your business and forget about the rest,” he added.
On start-up investment, Prof Haslem added that start-up founders and executives need to realise that times have changed. Quoting an article by techcrunch, After the end of the startup era , Prof Haslam said that there is a new shift where we live in a new world now, and it favors the big, not the small. Big businesses and executives, rather than startups and entrepreneurs, will own the next decade; this is evident with the increase of startup buy-outs by bigger companies.
So, when is the right time to scale up? Prof Haslam stated that as start-ups look into scaling up, it was equally important for them to also take time to see if the time was right.
Scaling up takes time and citing an example of Air BnB, Prof Haslam stated, that it took the company close to eight years to hit five million users and only one year to hit one billion. The same applys to companies like Google and Facebook.
“This goes far to show that for a start-up to scaleup it would take a minimal of up to ten years. The major mistake that a lot of start-up founders make is giving up on just at their starting point or just before they hit their exponentiality,” he added.
As part of the workshop, Prof Haslam also advised the attendees that it was important to discover the differences between scaling and growth whereby growing means that company’s revenue and costs grow at the very similar pace while scaling on the other hand doesn’t require an increase in spending to trigger an exponential growth in revenue. You just get a maximum profit with a minimum investment.
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