I work with startups at all stages of growth with few having got acquired as well with large enterprises looking to be software driven. While interacting with our clients and their investors as software outsourcing technology partners, few patterns emerged particularly during growth, scalability, business maturity and valuation discussions.

Wanted to share my thoughts on what to product business need to think about from a product, technology, and operational readiness while deciding to scale, using external examples. Investors care about return on equity and the way that happens is if founders and management care about users, nurturing team productivity and delivering on the committed outcome.

In this post, I won’t be covering aspects of demand, marketing, sales, cash flow and revenues and wanted to keep the focus on product, systems, and technology.

Let’s dig in:

Vision and readiness

Have clear thoughts about the problem you are solving and markets you want to disrupt in short and long-term without losing your way. Have ideas and data on where you need to invest for maximum impact. Try to get an unconstrained (whether you have the means today or not) perspective on what needs to improve to make you a leader in your space.

For example – If you are a product business, what needs to happen for you to become a platform? Are you taking steps in that direction? Amazon launched as a retailer in 1994 and in about six years introduced Amazon Marketplace;

Google began with a search engine in the 1990s and around 2000 introduced search advertising, same was the case with Apple and many others garage to riches companies.

Future-Proofing

How to ensure that original spark that leads to the innovation flame sustains alongside the gained stability. Can you demonstrate that thinking in your operations and technology roadmap? No matter what size you are, at some level, you will be in competition with the FAANG (Facebook, Apple, Amazon, Netflix, and Google).

Things like cloud computing and cloud migration, machine learning, edge-computing, serverless, platform thinking architectures are very much accessible and affordable to implement today no matter what your size. Last but not least do you have competent engineering access (in-house or outsourced) to bring all this into an evolvable design-led architecture to work together.

Take Amazon as an example, one of the reasons their AWS (Amazon web services) offering got built was because of a mandate Jeff Bezos issued sometime around 2002, (link) leading to a decoupled architecture and designing with intent to externalizing service interfaces and becoming a full service software company.

It’s important that you don’t just worry about fixing issues as they come along but also demonstrate some long-term thinking and placement of future building blocks in your product.

Co-opetition Strategy & User-value Obsession

People say if you care deeply about your product, focus on innovation then competition fades away. Fact is we are operating in a dynamic market ecosystem evolving faster than your product.

No taxi or hotel business anticipated Uber or Airbnb to take the significant share of their market. Imagine if US post had thought of email before Hotmail and Gmail.

It’s about obsessing over what your user’s care about, not about your innovation! Companies at the time need to cannibalize their own star products and self-disrupt before someone else does it to them. Whether by partnering or acquiring as a means to remain relevant to your users.

A company like Facebook had to acquire Instagram as a defensive and offensive strategy. ‘Photos’ was one of the core feature activities around which Facebook’s other social activities and interactions were getting created. When they realized that this core product value creating an activity (photo sharing) was happening outside of Facebook and on another platform (mobile).

They needed a defensive bullet to plug the potential current user loss and also get the foothold in the mobile user world as an offensive strategy. So how far can you go to maintain your product’s value to your users?

Data Driven

It’s important that data centricity is baked in and facts rule over opinions. Building in instrumentation early in your product development alongside functionalities like feature toggles with continuous delivery helps you test, iterate and predict with data.

Thinking about methodologies to tap into user insight that will let you focus on optimizing the core value proposition of your product as you make scaling decisions.

Are you thinking about building a test and experimentation infrastructure to figure out which features are giving the ‘Aha moment’ to what set of users?

What needs to be tweaked to give a sustained experience to those set of users leading to greater ROI. One good example is Netflix – Since its inception, Netflix has been using a/b testing and personalization to create a culture of “truth” for making product decisions around users.

Processes

Fast-growing companies look at the process as extra work. But all processes aren’t bad or stall progress.

Any process that removes impediments, provides a framework to set expectations, solve problems, enables the team to collaborate in a common direction and empowers the team to be productive, is a process you need.

Things like what happens if there is an outage in the middle of the night but you have high traffic from opposite time zone? Who does what in that case, is there an escalation matrix? Having a ready set of operational procedures assures that you are set to scale with fewer hiccups.

Automation

Systems scale quicker than people and with less friction. You need to be proactively figuring out things to automate. Have you thought of implementing self-healing systems? Are you using AI (Chatbots), to automate some of the customer support function? Netflix a leader in using automation they built solutions like Chaos Monkey, doctor monkey, conformity monkey and others (link), essentially collection of automated tools that randomly disables, fixes and checks for best practices of their production instances to make sure they can survive common types of failure without any customer impact.

Culture

How do you cultivate a productive culture where you can attract, grow and retain talent, encourage risk-taking without fear. Not everyone is your team will be a prodigy with a product DNA but how does your culture treat those who aren’t?  How can you empower the non-prodigies to introspect and gain the skills and capabilities to be a winner?  Supplement this with a culture of sharing, avoid celebrating ‘lone wolf’ over team wins instead celebrate entrepreneurial resilience and sticking together during tough times.

Finally, a culture of data and documenting learning on what works and what doesn’t, –  things like learnings from user journeys, past glitches etc helps save a tremendous amount of redo time and avoiding repeat mistakes, giving the team short wins and confidence.

You can call it engineering culture or customer-centric one, finally, it’s about cultivating a culture of effective collaboration for solving problems with empathy for both your colleagues and your customers.

Managing Complexity

How do you make choices to simplify as you grow in complexity? Building great products is in part about reducing complexity and making choices. As you are growing at breakneck speed, re-evaluating priorities, it just gets hard. Then it comes down to how to think about debt, every time you introduce any changes, modify the design, adds up to complexity.

Having a value-driven decision-making process helps to figure out what technical, product, design debt to carry and what’s hindering progress.

Governance and Compliance

As you grow globally, compliance becomes an ever-evolving beast. How do we bake in the methodologies and mechanism to connect, authenticate, control, and govern trust around your user journeys as you lead them to value? Things like intellectual property and security get importance but rules and local regulations around data privacy, confidentiality and authentication should be considered equally critical to build trust and ensure the longevity of your business.

Impact of Scaling

When you scale, that amplifies everything. Not just on infrastructure and operations cost, but also brand impact. As you grow positive and negative feedbacks get amplified over the social web.

For example, if you have an outage – the amount of coverage and frustrated customer voices can be seen and heard by hundreds of thousands of people on Twitter, LinkedIn and even those unheard of blogs.

Do you have built-in mechanisms and control frameworks to handle such crisis? It’s also important to note that the bigger your business gets, the more expensive everything will be. You have to be vigilant not to let costs scale faster than your planned funding and revenues.

Conclusion

At the end of the day to grow rapidly and have investors put capital and faith in your business, its necessary to have a plan and be ready for exponential growth and global reach.

Can you demonstrate the business maturity to hit the ground running without losing momentum? Beyond the above points, there’s a lot more to consider. I am hoping the above 10 points can provide some direction so you can start to figure out the not so easy answers.