Back when startups were reinventing business, I remember hearing many entrepreneurs evaluate everything according to scale. As in, “We stopped doing that because it doesn’t scale.”
Scale is a useful quality to consider when thinking about your business’s growth.
Some businesses don’t scale well, if at all.
The business model that I run, an agency, is mostly comprised of businesses of less than 25 people working with a handful of clients. There’s an east coast agency that is upwards of ~1,000 employees (Huge.) But they’re the outlier agency for size.
Another aspect of this is time. Software companies can instantly add and service a customer. That doesn’t change whether it’s one or two hundred new customers. Other businesses can go bankrupt attempting to service too many new customers.
So along with the ability to expand capacity, your business has a soft constraint in how fast it can expand.
Growth capacity and growth rate are almost inherent to your business model.
This is important to understand when it comes to your ambition.
VC’s don’t dump money into agencies like mine because agencies don’t scale. For the same reason, if I tried to dump cash into growing my agency, I would hit some natural limitations.
If you thought about your business not as a unique snowflake, but as member of a class of animals, would it be a hare or a tortoise? What would be the inherent advantages? The drawbacks?
Featured image is the tortoise and the hare and is a 19th-century illustration of La Fontaine’s Fables by Jean Grandville. Used under public domain.