Having been happily away from the London startup ‘scene’ for a little while, it was actually rather refreshing to talk with a friend about her startup ideas a few days ago.
The most difficult part of the conversation was getting across the central idea of building a scalable company – i.e. that, given that starting up a scalable company is almost exactly as hard as starting up a non-scalable one, why waste your time with the latter?
Scalability isn’t about making yourself rich, it’s about seeing the world as a long series of genuinely accessible marketplaces and distribution channels, all of which you can get to from wherever you happen to start. Contrast that with being, say, a maker on Etsy etc: all such ‘creative platforms’ tend to do (in my opinion) is encourage people to build their own never-really-satisfying niche, and then lock themselves firmly into it. It’s nice but… not really (capital-B) Business in any properly entrepreneurial sense.
But at the same time, as we were talking I felt like I had silently morphed into a bit of a dinosaur without even knowing it. For even describing ‘scaling’ in such openly conceptual terms is a bit of a cop-out, startup ‘Top Trumps’ word fakery more for PowerPointing than for actually using in The Real World.
What struck me is that the genuine craft of entrepreneurialism isn’t about “aiming for scalability”, but rather “avoiding nicheness” – for what’s worse, (a) being trapped in a ghetto, or (b) being trapped in a ghetto that you built yourself?
The problem with ‘scalability’ – and indeed with all the other over-blown and over-conceptualized ways of thinking about startups – is that they can so easily become slideware cargo cults, bullet-point lists of abstract qualities or attributes or methodologies that your new business Must Have In Order To Be The Real Deal. You know, like that whole Lean Startup thing. *sigh*
The sad truth is that most startups dismally fail to service even their most accessible, best-understood markets: and so the whole notion of being able to scale that initial hopeful venture to attack larger, more global markets is rarely little more than a tragicomic joke, albeit one that many angel investors like to obsess over.
So what’s the right answer, Nick?
I guess I’m as tired of “conceptrepreneurs” (for whom scalability is not only utterly essential but also the backbone of slides 3-5 in their killer presentation deck) as of “nichepreneurs” (who deliberately aim low, probably out of a misplaced sense of fear). For me, the former group embodies the pointless, ungrounded sophistication that is all too typical of urban startup discourse: while the latter group embodies the trembling wannabe naivety about business I run into all too often these days elsewhere. Both suck.
For me, startups need to be a living social revolution – if you’re not in it to dramatically change people’s lives for the better, you’ve probably wildly misjudged the value of what you’re doing. All ‘scalability’ therefore means is that you’ve tried to set things up so that The Revolution Can Go Big: but without a great big revolution right at its heart, that startup is very probably a waste of time / effort / money, sorry. 😦
Funding Startups (& other impossibilities) 
Comments on: "Scalable startups…" (2)
You make some very important points here. I’ve been happy as a one person ‘entity’ working with colleagues as part of a network the past 15 years.My brother, likewise, has had an engineering business for 20 years and one of his (personal) goals has been to stay small and manageable. He’s kept employees at about 5 and it has been a place of learning about managing a business for his three children, one of whom now runs his own small energy equipment company. While mine might be called a typical ‘lifestyle business’ my brother’s would not be, even though, because of the conscious choices he has made, that’s exactly what it is. He’s constantly rejecting ‘pleas’ to grow or scale up from local government and SME support agencies . (THese people have cushy jobs, take zero risk and take home more than myself or brother put together and it erks me that they are almost insisting that we grow our respective businesses in return for a grant or jobs subsidy).
That point made, as someone who has been engaged with startups and small business development for a longer than I care to say, Lean startup was a breath of fresh air for me. That it is a bit faddish at the moment is only to be expected. In time, the practically good bits will remain while the fanciful elements, like the ‘grail’ of scalability, will become less prominent.
One last point……while the scalability aspect came with the original lean startup concept (Ries and Blank) the lean start movement would never have become what it is without Alex Osterwalder. We should think on that. Who’s made the biggest contribution in practice, Ries or Ostwerwalder?
Pete: I’m not pro-“lifestyle business”, nor am I against it. And even though scalability as an absolutist, must-have, abstract quality turns me right off, I’m really not against turning great opportunities down on some kind of abstract principle.
Incidentally, there’s an interesting chess book called “Move First, Think Later” that kind of embodies that same antitheoretic approach: I wish business books were like that, i.e. a little more pragmatic and rather less than a consultancy business model that never quite worked and never will genuinely work.
And for me, “Lean startup” is no more than a small good idea that has found itself wrapped up in a skyscraper-tall pretension of universality, a soundbite that’s being sold as a philosophy / methodology. If ever there was a prize for demonstrating the foolishness of premature scaling, Lean Startup should surely be the bookie’s dead cert. 🙂