Scaling up can, and will, vary from business to business, but what is of greater utility is to understand how this scale can be achieved
To understand how entrepreneurs navigate through the journey of scaling up, we need to take a closer look at the business model framework
As investors, we look for brilliant business model execution that has the ingredients of agility and value creation
For Indian businesses, the past five years have been a masterclass in change. Consumption patterns have evolved, and new themes have captured people’s mind-share and wallet-share. What was once considered niche is now considered mainstream.
We at Fireside have had the opportunity to witness this changing landscape firsthand, as well as work with several digital-first entrepreneurs as they build their brands. One theme that is commonly spoken of across the ecosystem is the idea of ‘scaling up.’
Scale is frequently viewed in terms of revenue, customers, repeats, and related metrics. These can, and will, vary from business to business, but what is of greater utility is to understand how this scale can be achieved.
How do entrepreneurs structure, set up, and build capacity to be able to achieve this goal? How do they navigate through the journey of scaling up in the dynamic digital ecosystem? To understand these questions, we need to take a closer look at the business model framework.
Business Model Framework
I always use a race car analogy to illustrate the business model framework, where elements such as fuel, engine, turbo boosts, kickstarts, and lubricants must all work together to deliver speed and maintain pole position. Founders of new-age brands are similar to race engineers in a Formula One team with no sponsors. You are strapped for resources, living on the edge and you know you can control only so many factors – yet, you need to win the race.
For a new-age company, the key building blocks for setting up and scaling would include:
- Building a customer-centric, transparent, and purpose-driven brand
- Managing touchpoints across channels and marketplaces to deeply understand audience needs and behaviour
- Fostering an agile, scalable supply chain to respond and deliver on growth levers
- Instituting a data-led system that guides decision-making on the basis of real-time analysis
- Setting up a culture and practice of innovation to leverage market opportunity
- Integrating people, processes and systems in order to work together seamlessly to deliver value
Let’s take the example of the eyewear brand, Lenskart. The brand’s purpose is to provide better vision for everyone. Its touchpoints, therefore, are a combination of offline retail and online. They heavily leverage technology across each stage of the customer journey to enhance their customer experience. As the brand has scaled, it has continued to spot consumer needs and deliver its promise of trend-setting eyewear.
Similarly, Vahdam India exists to provide authentic Indian wellness through garden-fresh teas. It is available on its own online store, in offline stores, as well as all major online marketplaces. The brand’s estate-to-cup supply chain was its original moat, delivering garden freshness to consumers in India and across the world. As Vahdam has scaled, it has chosen to innovate in formats and blends to more fully occupy the wellness space.
Across different growth stages – from INR 1 Cr monthly revenue to INR 5 Cr to over INR 50 Cr – each stage has a distinct set of needs and choices the founder must make to rally their organisational resources around the business’ priorities. It requires a fine balance of time and capital.
In my experience, there are three aspects founders should keep in mind at each inflexion point when their business is ready to scale:
Don’t Over Optimise
It’s tempting to keep optimising and perfecting your product offering. However, you already have a product-market fit. You already have an ongoing relationship with a sizeable audience. Now is the time for you to start delivering the same value to a larger audience. So try and prioritise the things that will get you to that larger audience.
“Yeh image theek nahin hai. Isko change kar do. Ye banner font theek nahi hai… I took 3 months from the photo shoot to the launch of the business when the business was ready to launch. Because I was striving for perfection. And I realise that it was a lost opportunity, lost time. I needed to get on with doing it as opposed to keep thinking about it, and building it up”, said Ayushi Gudwani, the founder & CEO of FS Life.
Keep Your Eye On The Vision
It’s time for you to stop being the one-person operator, strategist, brand manager, product head, and more. Allow your second in line to take on some of these responsibilities.
Everything else will blend into the larger vision of the brand if you keep your focus on it. Vest ownership with your leadership team and trust them to deliver, towards a common goal.
Strengthen Your Moat
Invest in institutionalising your moat. Put in the systems and processes that ensure you are running this as a well-oiled engine, so it actually acts as a compass on your journey.
According to Vishal Gupta, founder of Gynoveda, “As an entrepreneur, the founder has only one job to do, and that is to build systems. If you’re building systems that you can run, I think you’re in a way building scale.”
These are three themes that we have repeatedly heard from founders. As investors, we look for brilliant business model execution that has the ingredients of agility and value creation. We repeatedly seek the balance of scalability and bandwidth that makes the best use of limited resources.
I hope this helps aspiring entrepreneurs think through their business models to deliver at scale — while remaining realistic!