74% of startups fail because of premature scaling. They start their scaling journey without a proper product-market fit or without being scaling-ready. A famous example is the premature scaling of Groupon with a product that had low customer satisfaction and retention and that needed high customer acquisition costs. The product was not ready for scaling.
To avoid the unpreparedness pitfalls, we dug deeper into the different dimensions of scaling readiness in our interactive “Scaling Readiness Lab” taking place during the ViennaUP Festival in Vienna in June 2024. We could win over TU Wien – i2c to partner with us and invite pre-scaling startups to join the lab for insights and discussions. At Konsultori, we always aim to provide frameworks that can be implemented quickly. We had the chance to converse and reflect on our framework with our participants. We intend to increase the learning curve from startup to startup on how to focus on scaling preparations. We want to increase the chances of scaling successfully.
Avoiding Death by Scaling in 12 Dimensions
If three-quarters of startups fail at scale, there is a lot of potential for improvement at this critical stage. Participants from 12 countries joined us at TU Wien to dig deeper into the topic. We discussed how to find out whether scaling should be started. We touched upon how to measure product-market fit. This is a milestone to achieve before scaling efforts can be started.
Many Scaling Readiness Lab participants have taken Konsultori’s automated Scaling Readiness Check. It evaluates the preparedness level of startups across 12 dimensions. Startups understand their readiness level with the automated feedback they receive. We have shown results during the lab and discussed the “best in class” and the dimensions that still need improvement.
When we jumped deeper into the specific dimensions of strategy readiness, go-to-market, people and culture, and operations readiness, conversations got lively as participants shared their journey, disappointment, and success on OKR implementation, finding the right people, and implementing CRM systems and processes. Luckily, we could reward sharing their stories with flying socks branded by ViennaUP which were in high demand.
Quite memorable were stories by our participants on
- the implementation of OKRs and how it changed the speed of building a company and aligning the team with a participatory approach
- using processes and standardization quite early on in a startup even if it seems still not necessary to smooth the process into scaling
- building an excellent team first as a basis for everything else
While a two-hour lab cannot cover all 12 dimensions of scaling readiness in depth, we could spark good insights and provide an overview of what needs to be focused on.
“Thank you Konsultori, Michael Kubiena and Petra Wolkenstein for a very insightful and engaging Scaling Readiness Lab session. The framework and tools you shared were very relevant for any startup who is on a scaling journey.”
Gaurav Gandhi, LinkedIN
One of our participants will always remember the flying socks challenge when sharing scaling journeys and even sent us his photo of proudly wearing his socks matching with ice-cream when still reminiscing about pitfalls of premature scaling.
Our key takeaways from the Scaling Readiness Lab
- People love to share their stories and discuss what can be done differently.
- Being well prepared in some but not all dimensions of scaling readiness does not lead to success. Unfortunately, good progress on all 12 dimensions is necessary to digest scaling. Scaling Readiness must be balanced.
- The scaling readiness check has shown serious preparation needs in three dimensions: organization, operations, and the USP.
- The majority of founders never go into scaling themselves because they do an early exit. Their organization, however, will need to develop and adapt. This will never end if it wants to become and remain sustainably successful.
Avoid death by scaling
A huge thank you goes to the TU Wien Innovation Incubation Center. We have had the pleasure of collaborating multiple times. They opened their doors to us and hosted us and our participants. ViennaUP and Dudu Gencel, thank you for the festival’s strong activities. You included us as a part of the ecosystem and gave us the chance to improve scaling readiness with a broader audience. Your ViennaUP branded socks flying around in the audience for sure made it a memorable experience. Thank you to our brave participants for sharing their stories, pitfalls and success with the audience. You provided some encouragement and learning.
Please watch out for our upcoming article on scaling readiness study results. We are going to do a scaling readiness run in autumn for anyone interested in preparing for scaling in a peer group with us. Whoever wants to test their readiness level, please use the scaling readiness check.