There are three stages in business all companies experience at varying degrees:
- a problem / solution
- product market fit
- and scalability
To understand the relevance of scale (the third stage), we first need to understand how the other two aspects of business lead to scale. Only then can we appreciate how awesome and important scalability is.
Problem & Solution: Business owners and entrepreneurs recognize a problem in a market, then they identify a solution to solve that problem. This is how a business begins.
If you can solve one person’s problem, you might be onto something.
Product Market Fit: Product market fit answers the question ‘do people want what I’m selling?’
In our experience, companies who have generated at least a million dollars in revenue likely have a product that is solving a market need. People want what you’re selling. Your revenue validates this.
You’re ready to scale.
Scale: Scale then, means you’ve identified a problem, found the solution, and confirmed the product you have solves that problem and generates customer demand.
Demand causes business growth which positions you to acquire mass amounts of customers who want to use your product or service.
A business that has the ability to support 1 to 2 million dollars in revenue, is ready to scale. Then it’s time to make a run at the next tier: 10 million.
Then 50 million.
You just need to find the people who want your product or service.
This is the problem Redstitch solves.
We throw the gasoline on your fire that connects you with more customers, and more leads (to close) – bringing those people right to your door.
At every stage of scale, things will come into play that weren’t needed or necessary in the previous stages. Processes and resources look different for a million dollar company, a ten million dollar company, and a 100 million dollar company.
Understanding how to get to the next “safe” plateau costs a lot of money, which puts risk on your business. You’ll be adding more employees and infrastructure, as well as a number of other resources that supports your business as it grows.
Making those leaps as quickly and efficiently as possible is scalability.
For example, if you’re ready to move up the scale, say from 100 to 1000 customers, you need internal processes in place that leverage your people and resources, allowing your product and service to survive the leap.
You also need an equally enduring external distribution strategy for that level of customer acquisition: meaning the ability to distribute to 10x (100 x 10 = 1000 customers) the amount of customers.
Now, we challenge ourselves: ‘how many customers can we add until there is market saturation?’
Because when there is market saturation, business is good – real good. It’s market domination. You can now move into other markets, or sell the company for an attractive chunk of change.
The question is then, do you have the processes in place as you grow to enable you to adapt and accommodate your next wave of growth in customers?
Is your business scalable?
Is your business scalable?