A few weeks back I wrote about Minimum Viable Products (MVPs) and their importance. In that post I touched on the importance of building an MVP with scalability in mind. Why is this so important? Since most tech companies cannot be successful, let alone survive, without a huge user base of returning customers, it is very important to (1) consider whether your idea has the potential to scale and (2) start building your product and operations with scaling in mind.
This post will focus on determining whether an idea has the potential to scale. It will be followed by another post that will explore building products and operations with scaling in mind.
This is the starting point when talking about scalability. Without a scalable idea that has the potential to be used by thousands of returning customers, there won’t be a business to scale. Think tech companies like Carriage, Uber, Instagram, Whatsapp, Facebook, and many many others - they all have a huge user base of returning customers, and this is why they are successful.
So how can you figure out whether your idea has the potential to scale? I try putting some science to it below.
1. Start with the problem you want to solve. Is it a real problem?
2. Identify the group of people you are hoping to solve the problem for, also known as your Target Market.
This is the target market of your full fledged product, not just your MVP. A target market like Photographers All Around the World is perfectly fine, even desirable - the bigger the market the better.
However, you need to be realistic, which isn’t always straight forward when it comes to your own ideas. Seek other people’s opinion and be open to listen, really listen, to what they have to say.
3. Identify a small group of users from your target market to start with
The group needs to be (1) easily accessible to you (same country for example) and (2) in need of your solution. It is important to note here that it’s not easy to find a group of users actively looking for a solution like yours. This is why most tech companies start offering their services for free to demonstrate their product’s value. Linkedin started that way before introducing Premium Profiles.
4. Come up with and write down your “Growth Hypotheses”
Your Growth Hypotheses answer “how will you get from the small group of people you started with, to cover your target market?” At this stage, it is too early to be concerned with getting your growth hypotheses a 100% right - getting them right will require rounds of iteration after your MVP’s launch. The goal now is to have an idea.
5. Moment of Truth
Is your problem real and worth solving? Is your target market in the thousands of returning users? Can you identify the small group you’re going to start with? Do your growth hypotheses make sense? Congratulations. You have an idea that has to potential to scale.
Knowing for sure whether your idea is scalable before launching is a very hard thing to do; I would argue that it is impossible. However, a sanity check is required before moving forward, and this is exactly the point of this post.