The Right Time to Think about Scaling your Product
Hint: When you’re growing and have proven demand for your product
The best time to think about scaling your product is when you’re growing and have proven demand for your product.
This is because once you scale, it becomes much harder to get back to the same level of traction you had before scaling. So, you want to make sure that your product is in a good place before making the decision to scale.
This decision will also depend on the type of company you are building. For example, if you’re building a SaaS or an enterprise product, then it makes sense to start thinking about scaling sooner than later.
This is because these types of products have more variables that can affect growth rates. And so, if you want to grow quickly and reach escape velocity, then it makes sense to start thinking about scaling early on.
For other products like consumer apps or games where there are less variables affecting growth rates, then it might make sense to think about scaling later on in the process.
How Do You Know When It’s Time To Scale?
There are several ways that startups can know when they should be thinking about scaling their business:
1. Sales & Growth Rates
This is the most common way to know when it’s time to scale. If you’re growing at a rate that you can’t keep up with, then it might be time to think about scaling your product. This could be in the form of hiring more people or adding more resources.
2. Quality of Growth
If you’re not growing in a sustainable way, then it might be time to start thinking about scaling your product.
For example, if you’re acquiring users and they aren’t sticking around or are unengaged, then this is a sign that you need to start thinking about scaling your product.
If they aren’t engaging with your product, then they aren’t going to stick around long enough for you to monetize them and generate revenue from them.
So, if you see this happening, then it might be time to think about how you can fix this issue before scaling your product too much further.
3. Increased Demand from Customers & Users
If customers are asking for more features or want more from your product than what it currently offers, then it might be time to start thinking about scaling the product before things get out of hand and end up going over budget or taking too long (if this is an internal team).
This could also happen if users start reporting bugs or have a lot of questions and support tickets coming in that aren’t getting answered quickly enough by support staff or don’t get resolved as quickly as users would like them to be resolved (if this is an internal team).
In both cases, if demand from customers and users starts increasing and isn’t being met by the current state of the product or team, then it might be time to think about scaling the business so that those needs can get met in a timely manner without negatively impacting growth rates (or customer retention rates).
4. Cost Structure & Team
If your cost structure is changing, then it might be time to think about scaling your product.
For example, if you’re building a SaaS product and you’re hiring developers and other people to help build out the product, then it might be time to start thinking about scaling your product.
This is because as you scale the team, costs will go up accordingly. If you don’t want costs to go up too much, then it might be time to start thinking about scaling the product so that those costs can be managed more effectively.
The same goes for if you want to scale an internal team and want to grow faster than what you currently have in place. In this case, it might be time to start thinking about scaling the product so that the team can keep up with growth rates and continue working efficiently without having to hire more people or change their current processes or way of working.
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.