There are more than 214 global startups that claim to have achieved the coveted status of "Unicorn", which means that they have reached a value of one billion dollars. Becoming a unicorn may not be the ultimate goal of all entrepreneurs, as some of them may be thinking about the moon and some may be in the game simply to solve a problem. Whatever it is, having the coveted label attached indicates the growth of the company.
Scaling is a fundamental part of the success of any start-up. Most do not manage to find the right team, investment or product market fit, at the right time. Startups that do it can always stop bleeding while trying to evolve. Why? Entrepreneurs tend to use scale as a secondary thought. Most seize the opportunity to make the most of it – they maintain a micro-perspective while missing the required macro-planning.
Many entrepreneurs are asking the importance of putting it on a global scale. With a big market in your geography, there are a lot of insights in your geography to maintain dominance. Why risk the global scale? Because for every Uber, there will always be a Didi Chuxing and an Ola . Uber devised the revolutionary idea and immediately catapulted it to national success. Before they could enter China and India, there was already a well-established competition waiting for them. This competition was born from a scam of the original idea of Uber.
Scaling up globally allows companies to seize opportunities, maximize valuations and defend your brand / idea. Without scaling up globally, someone will soon enter your market with more capital and resources, based on the scam of your own idea!
The path of Blitzscaling
Blitzscaling is a phenomenon made popular by LinkedIn's co-founder, Reid Hoffman, during an interview with Harvard Business Review. Primarily for start-ups in the technology or SaaS sectors where the marginal cost of serving a wider market is low or if the benefit of the first investor is worth the cost. Blitzscaling focuses on the essential parts needed to grow with the company.
Technology giants, like Uber, tried blitzscaling strategies where they hired people based on the recommendations of new engineers without even having an interview. The biggest advantage of Blitzscaling is that it allows companies to focus on what is essential and allows them to scale exponentially at a very fast pace.
The fact is, since not all processes are developing with the company, there will be bottlenecks and inefficiencies. In the end, Blitzscaling will result in big wins or big losses.
With a small team and a very targeted product goal, the founders alone can manage the entire start-up. That said, it is difficult for founders to support growth as operations develop. They say that they are visionaries, those who know the ins and outs of the product, but who do not have the experience of scaling up. Many venture capitalists suggest calling on country heads or professional CEOs for a more effective scaling up, but the management experience of putting them on the map. scale does not guarantee the success of the global expansion. The best way to do this is to create a balance of power between founders and professional management.
A remarkable example of this is the leadership of Xiaomi India. Manu Kumar Jain, who is also the vice president of Xiaomi, is the CEO of his Indian branch. Over the past 3-5 years, Xiaomi has become the market leader. In doing so, the regional CEO, of which McKinsey was the consultant, played a leading role.
In all of his public communications, he said that while everything at the heart of the Xiaomi brand, synonymous with quality technology at affordable prices, is the same, he was free to develop the Xiaomi brand. ;business. That's why Xiaomi started with a risky e-commerce strategy and later also expanded into traditional brick and mortar stores.
Method of Process, Planning and Forecasting
This is the organized method for each planned step. Although it takes more time, it also saves start-up entropy because each step has its own set of goals:
Process – Identification and prioritization of key markets, establishment of detractors in key markets, team building process, product localization process
Plan : Maintenance of global culture, succession planning for the initial generic core team to make room for specialists, financial planning, establishment of KPIs for each target market;
Predict : Use data to predict results, take advantage of customer feedback, create a uniform growth trajectory to use as a reference, create an exhaustive list of possible scenarios with their solutions ready.
Zomato, the giant of restaurant discovery and food delivery, is a good example. After entering the coveted unicorn club, Zomato became operationally profitable. The company has maintained its business processes and operations on a scale using microplanning.
Such processes helped prepare the company for all the predictable expenses. For example, a company can arrange the financing of invoices if the period of receipt of customer payments is long. The financing of invoices implies that the invoice is generated and used as collateral to borrow capital from an outside source to execute an order. Between 50% and 90% of the invoice amount can be borrowed to honor the order, with the remainder (minus the financing costs) being received when the customer pays the bill. These processes help maintain working capital without endangering the start-up's assets, especially in companies with longer billing cycles.
Networking path for investors.
This is the modern version of the Brownfield way of global scale. Here, the start-up is looking for potential partners in new markets to reduce competition. Many, like the taxi booking giants Ola and Lyft, have already tried this. Ola comes from India and Lyft is American. Both, in addition to sharing a common rivalry with global giant Uber, have Baillie Gifford (their common investor) in common. After being associated, both made strategic investments in their respective businesses. Partnerships such as Ola-Lyft can help start-ups to scale globally to compete with heavily funded global giants, strengthen the management learning curve and facilitate technology transfer.