Learn scaling strategies while you eat
What can we learn about scaling from Michelin-starred restaurants?
Picture the scene. You’ve arrived for your reservation in good time. The restaurant is full, the atmosphere humming. Your waiter hands you a —
Actually…wait. Let’s back up and consider the basic buying process…especially in the B2B technology space. How do our prospects think about purchasing what we sell?
Firstly, they will seek to achieve a specific goal or fix a particular problem. Simple examples might include:
- increasing revenue
- reducing cost
- improving customer experience
- adding capability
- improving the value proposition
- improving efficiency
- being compliant
At a high level, the decision-making process will involve considering a range of basic questions. For example, will your product or service:
- achieve the desired outcome?
- come in under budget?
- faster time to value?
- competitive agility?
- save (or make) more than it costs?
- be implemented in a reasonable timeframe?
- bring any additional benefits (e.g. prestige, publicity)?
- integrate without disruption and complication?
And then, of course — assuming that you operate in a competitive market — they’ll rate your solution against your competition. On cost. On outcomes. On schedules. On experience. On risk.
And this creates a subtle trap, especially for early-stage businesses. Because in that early stage, we are vulnerable and desperate.
We need those sales, that money, that validation…and we’ll do anything to get them.
I have witnessed this in negotiations, proposals and contracts — the sight of a vendor attempting to please a prospect.
And the result (too often) is a unique, bespoke solution.
And that’s the trap. Every unique engagement brings unique costs, the time and money required to develop, test, deploy and support each customer for the lifetime of the contract.
Suddenly, the start-up is a project-based business doing custom development…and you’ve lost the foundation for scaling and profit.
Build once, sell many.
This is why focus is critical for B2B SaaS businesses.
You can find this focus at the intersection of two simple requirements.
First, let’s go back to the busy restaurant, with its atmosphere humming. The waiter hands you their à la carte menu.
And it’s short.
And this is what we need to learn. The best restaurants focus on a few perfect, popular and profitable dishes. Food that they can scale as they fill their tables.
Of course, some patrons may ask for small changes to suit their diet or preference. That’s expected and allowed for, not the kind of complete customisation that will disrupt the kitchen service.
We should follow their example. The best approach is to have a standard solution we might call the ‘vanilla’ version. This should be at least 80% of your product or service, and it’s standard for every customer. That way, when a customer wants customisation (e.g. integration with a third party service) it is limited to no more than 20% of the deliverable, and preferably through configuration or system integrators rather than in-house development.
The point is to limit the time, money and focus you spend on custom work.
And this goes hand in hand with the second requirement. Qualification.
Successful businesses take the time to qualify a prospect properly before engaging. They seek to understand the ‘why’ of any customisation, distinguishing between one-off projects and real market need.
And when it falls outside their 80/20 offering, smart businesses are comfortable saying ‘no’. This is the right thing to do when a requirement is outside your strategy, budget, resources or core market.
Scaling requires repeatable sales.
(This is where it is important to ensure you have defined your ideal customer profile).
The best-run companies go further, engaging with their market early enough to achieve product market fit, and influencing tender requirements towards their products and competencies. This requires the alignment of sales, marketing, customer success, bid management, and product management organisation…but the result is a product that fits customer needs and reduces the pressure to create bespoke work.
Of course, articulating these ideas is much easier than acting on them, but this is how successful businesses scale. This is how they pivot from project-based work to product-based growth.
Through focus, qualification and saying ‘no’.
Our customers are selective about who they work with. We must be too.
About Mitul Ruparelia
Mitul Ruparelia is a Managing Partner of Fortius Partners, a growth transformation partner for private equity and venture capital backed businesses. He has over 20 years of growing profitable, sustainable business units, defining strategy and leading sales, marketing, product, innovation, finance, raising investment and people management for established, underperforming, and scale-up businesses. He has helped companies scale to valuations of over $1 billion.
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