So, your startup has been growing, charts are still going up and it’s time to bring more staff on board. That’s awesome but could you answer one question before resting on your laurels? Great. The question is: what’s your plan for scaling your startup? Because I’m afraid everything you know about scaling could be wrong.
The barrier ain’t nuthin’ to f**k with
As the Internet is getting more mature, the technological barrier to creating a new digital product is lowering with every passing year. In the early 2000s things weren’t as easy as pie — to become a serious startup you needed significant capital for your programmers (if you’re lucky enough — GREAT programmers), expensive co-located paid servers, etc.
Compare that to Amazon’s AWS or another serverless tech these days — it has become so accessible that anyone can become a programmer and there’s no such thing as a technological barrier to run a startup anymore. If there was, we’d all be lighting our cigarettes with money, don’t you think?
And that’s when the new barrier comes in…
But before I’ll tell you the secret of scaling startups in 2018, we should make sure we’re on the same page when it comes to distinguishing scaling from growth.
Scaling vs Growth
There are 3 stages of business — launch, growth, and scale. In the business lingo, growth is being referred to as the increase of the desired parameter (usually revenue). It’s the stage just after launching the product when the revenue grows as we linearly add resources.
Most businesses stick to the model of growth in order to progress — they add more and more resources to boost sales of the final product. But once the consistent growth is achieved, it’s time to reduce the costs and add more to your profits and revenue. This is when the scaling comes in.
In terms of business, scaling is creating a sustainable growth that doesn’t eat up all your resources to expand. It increases the revenue, simultaneously bringing down the total cost of all operations.
So what is the new black of scaling?
The only constant in the technology industry is changing. The barriers of yesterday have been commoditized, and there is a search for a new differentiator.
There’s no difference whether you’re running a B2B or a B2C startup — your customers are “divinely discontent” to quote Bezos. That’s why the best way to scale your business is by giving them a product even better and more intuitive they’ve expected.
And that is how a new barrier has — the UX process. Yup, UX is the new black.
Why? New trends in IT confirm this business scaling revolution:
Major tech companies want more designers than ever. Facebook, Google, and Amazon have hired 65 percent more designers in the past year.
You know UX is having its moment when IBM, the normcore uncle of the tech industry, gets in on the action.
Over 35 design agencies have been acquired by big tech companies (including Facebook) since 2015. John Maeda mapped out all the acquisitions in his big Design in Tech report this year.
According to a study by Forester, companies who invest in UX, see a lower cost of customer acquisition, lower support cost, increased customer retention, and increased market share. The research also shows that every dollar invested in UX brings 100 dollars in return. That’s an ROI of 9,900 freakin’ percent!
Scaling by improving the UX — cases
Since 2011 Uber transformed from a car service for 100 friends in San Francisco to a global transportation network. Now the service is available in 83 countries and fulfills 40 million rides monthly. At first, Uber was just a simple way to hail a cab, which was freaking impossible in some places of the world, but with time it has evolved into a full computing experience. The creators achieved this goal by constantly adding new features that would make commuting from point A to point B the most seamless and safe experience.
At the beginning Uber served its users an opportunity to commute without a big effort — all you needed to do was choosing a pick-up specific spot, waiting for your car to arrive, while knowing the estimated price spread, and rate the driver. It was something back then, but the real WOWS came with improving the user experience. Now every rider can choose the pick-up spot with more accuracy, add stops on the way to the final destination, order a car in advance and decide about its class, decide how to pay for a ride (cash, card or splitting the payment with co-riders) while knowing the exact cost, and tip a driver. Their growth is closely connected to scaling the UX process and that’s why Uber is no longer just a hailing app, it’s all about getting from point A to point B in the quickest, most pleasant and safest manner.
Since Airbnb was created, its role has evolved — the basic goal was to help people with finding just a couch or a room to stay, and now it’s providing their users almost complete travel experience.
You can find a perfect destination to relax or work, but also local attractions recommended cities and restaurants.
Today Airbnb is valued at $31 billion. But nine years ago they were close to going bust — like many other startups, they had launched but barely anyone noticed. Since then, they’ve learned a lot about winning over customers. The best example is the simplest one — after Airbnb's design team changed the way of adding properties to a wish list, replacing the star icon with a heart. It sounds like not a major change, but the results were outstanding — the engagement increased by over 30%!
Tinder’s ethos is to be simple, fun, and useful. It was launched in 2012 across a row of college campuses. After 2 years the app was getting about a million swipes and 12 million matches daily. In spring 2015 the creators started to add new features, which resulted in even faster growth. Since then users who are paying for their Tinder accounts can use such options as Passport, which allows them to swipe all over the world, give unlimited Superlikes, boost your profile to be more likely seen, and more.
The creators broke a paradigm of their predecessors, requiring filling out lengthy questionnaires and writing autobiographies in order to find a match. Along with a colorful and playful UI, Tinder has created the first online dating experience that removes a bunch of work on the user’s part, and therefore it’s easier for them to find a match and experience the real value of the platform.
Remember — the competition is huge and customers are more demanding. The crucial thing for every startup is to monitor how relevant the product is to someone’s life and what’s there to improve. It’s all about making the experience more intuitive and — the most important — pleasant. And the more pleasant the experience is, the more $$$ you can expect. Easy? Easy.