Growth vs scalability

Sometimes growth is everything... like in 2020 and 2021. And then we remember that scalability is key. What are the differences between growth and scalability?

Growth and scalability are two important concepts in business that are often used interchangeably, but they have distinct meanings and implications for a company. When you are leading a startup, you must focus on scaling your business, that’s how you get to the next level.

So, what’s the difference?

Growth refers to the increase in a company's revenue, profits, or market share over time. It can be measured through metrics such as sales, customer count, and employee headcount. Growth can come from a variety of sources, such as expanding into new markets, increasing the frequency of purchases from existing customers, or developing new products or services. Put simply, it means making more money with what you already have.

Scalability, on the other hand, refers to a company's ability to handle an increase in demand for its products or services without incurring proportionately large increases in costs. A company that is scalable can grow its revenue without having to add significant resources or infrastructure to support that growth. This is a key consideration for startups and early-stage companies that are looking to scale rapidly. For example, if you get twice as many clients, it does not mean that you have to hire twice as many employees.

And yes, the two concepts are related: a scalable company can grow its revenue and profits (but without incurring proportionately large increases in costs). That’s why this is an essential step for startups and early-stage companies that are looking to make their business profitable.

Ok, but how can I scale my startup?

Achieving scalability is not a one-time event, but a process that requires a company to refine and optimize its execution in any area continuously. This may include automating processes, outsourcing non-core functions, and implementing new technologies. It also means being adaptable: a company must be able to fit into different market conditions and customer needs.

One of the key ways for a company to achieve scalability is by developing a business model that can be easily replicated. By creating a system that can be easily replicated, a company can scale its operations to new markets without incurring large increases in costs. And by repeating I mean coping processes: marketing processes, product development and delivery processes, and customer service processes. 

There is no secret that another way to achieve scalability is by leveraging technology. This can include automating processes, using cloud-based software to manage operations, and using data analytics to make better business decisions. By leveraging technology, a company can scale its operations more efficiently and effectively.

Execution wins over ideas

I see that usually, we make the mistake to believe that the successful startups are the ones that had a great idea. Well, yes, I am sure that many of them had great ideas but that’s what makes you start the business, what makes your business successful is how you execute that great idea. This is something that we had crystal clear when founding Tiko, my company, and we have scaled it and that’s what makes us so efficient. 

More to read:

Scaling up. Mastering the Rockefeller Habits 2.0