The word ‘scale’ has multiple meanings, derived from varying roots. I’m sure a few new readers might assume I will be discussing the noun scale (“a machine for weighing”), considering that our company’s name is Heavy Chef. Nope! I will be discussing the business related definition of this word which essentially is a shorthand for ‘scale up’ (“to grow or expand in a proportional and usually profitable way”). Scale can therefore be associated with proportional growth and production of profit.
Heavy Chef, in partnership with Nedgroup Investments, Workshop17 and Xero, recently hosted a true ‘master of scale’, all the way from Silicon Valley, Gabriel Luna-Ostaseski. Gabe has invested in over 30 Silicon Valley companies and was one of the original consultants to Uber in their early days of starting up the business. Gabe founded Modernize, which became one of the fastest growing companies in Silicon Valley, and now heads up Upshift Partners, a Venture Capital firm that invests in high impact startups. In an exclusive masterclass for Heavy Chef community members, Gabe taught us the secrets of scaling a business/project, and it turns out most of us have been doing it wrong the whole time.
Gabe shared a 4-phase plan that will increase the scalability of your business/project and potentially lead to successful scaling. Here are the phases in the correct order:
The incubation phase is the first phase a business or project should go through with the end goal of successfully scaling. This is the phase where you define your problem to be solved, customer profile and solution. Like shaping your idea out of clay, this phase is the most intimate and should leave you falling in love with your business/project in the process. It is the phase of more qualitative and less quantitative work being done. The end result of this phase should be a detailed framework of your business/project, that will serve as a reference point throughout the next phases. Don’t rush it, this phase usually takes 3 months to a year to complete, as it will lay the foundation you’ll be building the structure of your business/project on.
Is your idea what you think it is? The validation phase is the phase most people confuse with scaling. Don’t fall for that trap. In this phase you should check, recognize and affirm the validity of your idea/s. You don’t have to spend large amounts of money on this phase, as it should be done on a small scale. Working on the flexibility and speed of operations in this phase will lead to a leaner business in the future. Should you realize a mistake in this phase, take a step back into incubation mode before you progress. Doing this will minimize the hurdles you might encounter in the future.
Like the word upshift suggests, this is the phase where you take your prepping to a higher gear. All the phases leading up to this one don’t require a team and can be considered founder phases. In the upshift phase, however, you will need a slightly bigger yet small team. Your business model should be refined at the end of this phase and you should be working out the operations and costs behind the repeatability of production and the predictability of results. Knowing exactly how you find your customers, engage and sustain interest in them is key for the completion of this phase. Customer and product metrics such as unit economics and NPS (Net Promoter Score) should be known in this phase. Flexibility and agility are therefore required throughout the upshift phase.
Guess what? You have done most of the work! Now all you need to do is focus on getting money and customers, as those are the fundamental factors behind profitability and scale. The scale phase requires you to share a compelling narrative with your potential customers and partners and convince them. Storytelling leads to sales.
The journey of scaling a business, project or idea is one for the books. It is not as simple and easy as it might seem. There are many factors to take into account and failing to do that will result in highly unpredictable results. The success of scaling your business will therefore be determined by how well prepared you are. So let’s get to the drawing board and start mapping our success.