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Why, How, And When To Scale Your Software Product

grow software product

Powerful ideas can help you to conceptualize a great product, moreover, excellent project management and technical competencies can help you to build that great product. While both are important, are we missing something?

We are! You ought to scale your product for lasting success, as I have explained in our guide “How to scale your software product”.

Like every other key task that helps you to make your business successful, scaling your product requires a disciplined and thoughtful approach. You need to prepare meticulously, and you might need some help. This guide on why, how, and when to scale your product offers that help, therefore, read on!

Contents

Scaling your product: What it is
Growing your product vs scaling it: The crucial difference
The various types of scaling that you can consider for your product and business
Why you should scale your product
The choice: Should you scale your product?
When you should scale your product
The various stages of scaling a product
How to scale your product
How to know whether you scaled your product successfully
Planning to scale your product?

Scaling your product: What it is

Let’s start with a few basics. Let’s understand what it means to scale your product. You may have an excellent product and you have received great responses from the market. Sales have been great and you see many more potential customers in the pipeline.

The question is whether you will be able to deliver to all the customers you have already sold to? What about the potential new customers? Will you be able to deliver to them if you sell to them?

These questions point to your capacity and capability to grow. Do you have the necessary people, infrastructure, and business systems to grow and support existing as well as new customers? Scaling your product means creating the capacity and capability to grow. Read “How to scale a business” to learn more.

Growing your product vs scaling it: The crucial difference

Now that you have started to think about scaling your product, you need sufficient clarity about what you need to do. One area that might seem grey is the distinction between growing your product vs scaling it.

Note that you can grow your product and business in several ways. While growing, you are focusing on higher revenues. To grow your revenue, you might incur higher costs too, which could cancel out your gains.

On the other hand, scaling focuses on your capabilities. You improve your people, infrastructure, and systems as part of capability development. This improved capability lets you can earn more revenue from your product without increasing your costs at the same rate! Read more about this in “What is scaling in business and how is it different than business growth?”.

The various types of scaling that you can consider for your product and business

There isn’t a one-size-fits-all solution that helps you to scale your product and business. Various types of scaling a product/business exists, and the following factors determine which type of scaling a company may opt for:

  • How much capital a company has;
  • The speed with which the company attains growth and how it adapts to this pace;
  • How efficient the company remains as it scales.

The various types of scaling a product/business are as follows:

  • Bootstrapping: In this approach, a company uses internal resources and grows organically. The pace of scaling depends on the inherent scalability of a product/solution, and this type of scaling can be slow. The company exercises greater control and it remains free from external influences.
  • Slow scaling: Companies that have already done bootstrapping and want to scale more might opt for this type of scaling. There are many similarities with bootstrapping, however, this approach typically needs some external financing.
  • Fast scaling: This approach entails rapid growth, and businesses typically need venture capital funding to ensure smooth scaling.
  • Blitzscaling: This approach of scaling involves reaching a massive scale in a short timeframe. Companies opting for this approach may prioritize speed over efficiency, and a large addressable market and uncertainties are the main drivers for such an approach.

Read “The four types of scaling your business” for more insights.

Why you should scale your product

At a fundamental level, if you don’t scale your product then your growth will not translate to profitability. You might still grow, however, you will also incur a higher cost. This signifies a lack of focus on capability development, and profitability will not grow as the revenue grew.

While you might be selling to an ever-growing number of customers, the delivery could suffer. This would result in dissatisfied customers and firefights, which adversely impact the reputation of your company.

On the other hand, if you consciously scale your product, then the following happens:

  • You would be able to support your growth, which will not be hampered by your people, systems, technologies, and processes.
  • While your customer acquisition probably continues at a fast pace, scaling enables you to support your existing as well as new customers. As a result, you would still satisfy your customers.

You can learn more about this in “Scalability”.

Successfully scaling your product will deliver one or more of the tangible business benefits:

  • Predictable revenue;
  • A greater market-share;
  • Diversified income streams;
  • Better customer retention;
  • The ability to create a value ladder of products for your customers.

Read more about these benefits in “Scaling your business – how do you scale operations?”.

The choice: Should you scale your product?

Having learned the importance of scaling your product, you might have zeroed in on scaling as your priority. However, you should first think through whether you should scale your product!

First of all, keep in mind that scaling is not just about enhancing your systems and processes. Neither is it just about hiring great people! You need to first scale your organizational culture before you are ready to scale your product.

Your organization must be ready to look for new opportunities as part of this shift in culture. We are in the midst of the digital age, and customer interaction is changing. When your business grows, your team needs the required cultural shift to manage the new levels of customer interaction.

How much can you extend your organizational capabilities optimally? Is growth the most effective mark of success for your business? These are the other questions to ponder over before you decide to scale your product. Read more about these questions in “Should you scale or should you grow? (The 2 strategies are not the same.)”.

When you should scale your product

You had to prioritize selling your product and satisfy your first set of customers with its features and performance. Scaling was probably not your priority at that time, however, you need to eventually scale to support your growth.

The most obvious indication of the need to scale is when your performance degrades. E.g., a software product might show a degraded performance when more users start using it. You need to watch key metrics like memory utilization, CPU usage, network I/O, disk I/O, etc., as explained in “8 key application performance metrics & how to measure them”.

I recommend that you proactively analyze a larger set of indications to determine when to scale your product. This way, you don’t need to wait for the business performance to degrade!

Consider the following:

  • Do you have a business value to offer to a large enough customer base? In that case, your business has the potential for growth and you should plan to scale your product.
  • Have you developed a great product already? Did you get real market feedback that confirms that you have an excellent product? In that case, plan to scale it.

Read more about these considerations in “7 ways to tell your product’s ready to scale”.

The various stages of scaling a product

By now, you have likely decided whether to scale, moreover, you may have found that the time to scale has arrived. You ought to prepare now, therefore, familiarize yourself with the various stages of scaling a product. These stages are as follows:

  • Analyze when you will need additional cash. Plan milestones around the points when you can’t scale anymore due to lack of funds and plan to infuse capital accordingly.
  • Find attributes in your company that reduces your risk, and utilize them to manage your risks during the scaling process.
  • Proactively watch the sales of your product and identify when it increases. Analyze how it increased by understanding directly from customers what worked for them.
  • You can’t sell your product to the entire world! It’s crucial that you identify who your ideal customers are, create their profile, and identify that winning use case.
  • Optimize your team, internal systems, technologies, infrastructure, and processes to increase sales to those ideal customers.
  • Remember that before you give a great push to your sales effort, you should verify whether you have scaled sufficiently. A greater sales push will increase your customers significantly, and you should be ready to serve them effectively!

Read “Scaling your business: 6 stages you need to know” for more insights.

How to scale your product

I recommend that you take the following steps to scale your product successfully:

1. Evaluate your current business realities, and plan

Review your current business and ask the following questions:

  • Is your product ready for growth?
  • Do you have people, systems, technologies, infrastructure, and processes to manage the situation if the demand for your product increases by two or three times overnight?
  • Will you still be able to deliver to all those new customers successfully?
  • If you don’t have what you need, by when should you increase your capacity?
  • How much capital will you need to increase capacity?

Read “7 ways to prepare your startup to scale up” for more insights.

2. Infuse capital

You can use one or more of the approaches I have mentioned above, e.g., bootstrapping, slow scaling, etc. This additional fund would be required for various kinds of capacity building, e.g., infrastructure, technology, people, etc.

Look to get the best value for the money you spend, e.g., cloud computing could be a great option to enhance IT infrastructure in a cost-effective manner. You could use a hybrid cloud deployment where you store your sensitive data on a private cloud, however, run all other workloads on a public cloud. Read “What are public, private and hybrid clouds?” for more insights.

3. Put in place systems to grow your sales

While you prepare to serve more customers by scaling your delivery capabilities, you also need to grow sales. Put in place an appropriate sales structure for this, which could include the following components:

  • A robust lead generation system;
  • A marketing system that’s capable of managing and tracking sales;
  • Capable salespeople;
  • A robust billing system.

4. Use modern technologies

The good news is that new technologies are making it easier for businesses to scale their products. However, you still need to find the right technologies and invest in them, e.g.:

  • Using managed cloud services platforms like “Infrastructure-as-a-Service” (IaaS) and “Platform-as-a-Service” (PaaS) could help you to focus on development instead of IT infrastructure management. Read “SaaS vs PaaS vs IaaS: What’s the difference and how to choose” for more insights.
  • Artificial Intelligence (AI);
  • Blockchain;
  • Internet of Things (IoT);

5. Find the right people

Any effort at scaling your product will only succeed if you find the right people to handle the new opportunities it brings. You need to onboard people in your core business areas, customer support representatives, project managers, software developers, IT infrastructure specialists, etc.

We at DevTeam.Space can help you to find competent software developers. Read our guide “How to find a good software developer” for more insights.

How to know whether you scaled your product successfully

Now that you have gone through the process to scale your product, how do you know whether you succeeded? You need to look at your revenue and operating costs. Note that the operating costs could include sales, marketing, administration, R&D, etc.

If your revenue and operating costs are growing at the same rate, then you didn’t scale successfully. You need to go back to the drawing board.

On the other hand, if your revenue grows exponentially while the operating costs see a linear growth, then you have succeeded in scaling your product. Read “How to know if your business will scale” for more insights.

Planning to scale your product?

In today’s digital age, you will likely undertake key software development projects as part of scaling your product. Obviously, such projects will have high visibility, therefore, consider working with reputed software development companies. Our guide “How to find the best software development company?” can help you to find such a partner.