My last article suggested the end is nigh for all the service-oriented businesses out there, but I promise the future is still bright! Regardless of what you're selling, if you execute through the tough decisions that face all business leaders, you'll be in good shape when it comes to scaling. Three big questions to consider:
- How do I keep my business agile, even as we're scaling up?
- How do I forge the right channel partnerships?
- How do I fend off complacency?
To answer these, let's walk through a few highly actionable items that will put your company in a position to scale effectively.
1) Agile Development: Minimize the Risk, Maximize the Profit
Aiming to get traction for a new or experimental product with a low price point is always a dangerous game to play. It can be a time-consuming and costly process, especially when the revenue stream hasn't really picked up yet -- one misstep can put you out of business before you even have a chance to get started.
Agile development is one strategy that ably serves to minimize that risk. When effectively deployed, agile development has allowed digital companies to release products in such a way that they can aim small, miss small, and then adapt quickly. Diminishing the risk factor will make a company lighter on its feet, giving it a better shot at bootstrapping the product development process. Business leaders should keep in mind that the more automated and self-sustaining that process becomes, the more scalable the business is as a whole.
By incorporating agile development, companies can get a product on the shelves and then fine-tune their internal processes. All this makes for an organic workflow and nimble business model: two things that were pretty much unheard of in the software industry as recently as ten years ago.
2) Make Channel Partners a Part of Your Balanced Breakfast
Channel partnering has its place in almost any product-oriented business' broad strategy for growth. But for most companies today, regardless of whether they operate in a business-to-business or business-to-consumer environment, this strategy doesn't solve for every possible circumstance. There are simply too many advantages afforded by direct access to your customer base that, again, didn't exist a decade ago.
Take the airline industry, for example. So many airlines are now trying to avoid the travel aggregators that gave them an early boost on the web, and they're right to do so. After all, why would you want to go through a middleman like Travelocity or Kayak when you can offer customers the best rates directly on your own company's website?
The Internet has definitely changed things in respect to channel partners, but these relationships are still part of a "balanced breakfast" when it comes to effective growth. Even on the services side of the spectrum, companies develop partnerships all the time -- maybe not with "channel partners" per se, but with similarly sized companies that offer and specialize in something totally different. In these cases, all parties stand to benefit from an active relationship with one another.
3) Don't Get Comfortable
The most important thing for any young company to remember about partnerships is that they require a certain level of ongoing work and commitment. Let's say you meet some people that are running a comparable company and all of you decide to work together. If you don't designate someone to properly oversee and cultivate the ensuing collaboration, that initial synergy will quickly fizzle and the relationship will go nowhere.
In short, successful partnerships require persistence. Someone needs to keep popping up and remind the other company, "Hey, we're still here. Here are three new things we do now. Keep clueing us in on new business opportunities and we'll do the same for you." Otherwise, they'll ease you out of the relationship in the same way that people stop going to the gym a month after New Year's. Companies that want to partner up in an efficient and sustainable manner need to remove the word "complacency" from their vocabulary.
For a company looking to scale, leveraging these partnerships is an excellent way to reduce risk. It often saves you the full-time cost of a new employee or venture until you've confirmed that a particular partner or project will succeed.
Ultimately, if you're a growing business and you're hungry to scale, you can jump in and seize the opportunities that bloated, complacent conglomerates might be missing. It's the principle advantage of being a small fish in a big pond, and those quickest to bite will enjoy the biggest dinner.