What does scaling SaaS mean? Part 3

After posting two parts, leapfrogging towards the third is very exciting. If you have come this far with me then I owe you something. So to do justice, let me start with what is not covered - runway, liq-pref’s, OPM, cap tables, safe’s, converts, category, magic of networking, headwinds, tailwinds, taxation, bridges, trust, valuable advisors and so on. 

Do you know a business owner who over-delegated and his employees distributed all profits of the company to themselves? It is mentioned in a book which he wrote eventually. I think enough said about how everything can not be covered in this forum. Speaking of posting in parts; in part 3, allow me to use the much awaited b-word and f-word. Additionally, posting in parts is trending. Last week (as I post this), President Trump was on a YT tech podcast in part 5; you get what I am referring to. So let's not wait anymore … 🙋

13 - Research says that one of the most essential skills of the 21st century is adaptability. If you look at history this is true about individuals as well as organisations. As you scale, based on the velocity of the scaling SaaS; every 3 years there will be a significant change that would have happened for good. Evolutionary changes due to scale have to be absorbed by the organisations to scale forward. In this case, will it help for the entire organisation to have a mindset? Here is a quote regarding organisations and its mindset ... 📚 

“Clearly the leader of an organisation can hold a fixed or growth mindset, but can an organisation as a whole have a mindset? Can it have a pervasive belief that talent is just fixed or, instead, a pervasive belief that talent can and should be developed in all employees? And if so, what impact will this have on the organisation and its employees?” 

14 - In addition to mindset, what is evident during scaling SaaS is exponential growth. We all agree that exponential growth has to be captured in consistent cashflow which is fed back into the same business. All organisations who go through scale over decades have a unique business model which is iterated to stand the test of time and all kinds of cycles. The network business model is a perfect example of this. Refer below paragraph regarding business models (business of platforms) and its potential for exponential growth. See, I gave you my b-word … 🎉 

“A network with a million users generates nearly 500 billion potential connections. What stands out is that the growth potential of a network business is not linear. Some would say it is geometric or exponential. Explosive growth due to network effects enables platform businesses to expand (or decline) so quickly in scale, utility and economic value”. 

15 - What next, after the b-word. Let me talk about myself. My day starts with waking up my kid to go to school, so he does not miss the bus. Then while driving in the morning, I forgive auto drivers who push me out of my lane; yes, lane discipline exists in India. Then I slow down my bike because some riders are stopping kind of in the middle of the street. I wonder what messaging apps they are checking on their phones? And then business decisions. So all in all, throughout the day am I negotiating? Imagine you being in a tariff trade kind of negotiation. Even with white hair, sometimes I still do not understand that I am in a situation to negotiate or not or I have already lost even the leverage to negotiate. 

During scale, this becomes one of the most important skills which can have a meaningful impact. I can slow down in traffic and settle; but maybe not in business which is scaling. Here is an important lesson - it is very hard to accept that hard things are really hard … 🏮 

“Don’t settle and - here’s the simple rule - never split the difference. Creative solutions are almost always preceded by some degree of risk, annoyance, confusion, and conflict. Accommodation and compromise produce none of that. You’ve got to embrace the hard stuff. That’s where the great deals are. And that’s what great negotiators do”. 

16 - Ever thought about the cost of scale (very important as we are out of zirp). What is or should be the equation between cost, spend and scale? During scaling SaaS, even if spending as a restriction is not there, its byproducts feel like invisible traffic barricades because of which innovation, creativity and motivation is hurting. Ideally, in a scaling ecosystem restrictions are acting as guidelines and protecting us for the good. Refer to this para from ‘The art of Impossible’. Take the s-word as a bonus … 🚦

“Evolution shaped the brain to enable survival. But evolution itself is driven forward by the availability of resources. Scarcity of resources is always the largest threat to our survival, making it the largest driver of evolution. And there are two possible responses to this threat. You can fight over dwindling resources, or you can go exploring, get creative, innovative, and cooperative, and make new resources”. 

17 - As I post this series in parts, I have to mention a movie right? There is an Indian movie which was nominated for Oscars where the actor goes through multiple failures in his life and because of those he could answer questions in a competition to win a big prize. During scale, there is an unavoidable urge to always chase new ideas and experiments. I get it; innovator’s dilemma. It will be harder to judge which experiments will work, which will bring short term gains, which will bring long term gains/ consolidation and so on. 

Ideas and experiments which do not work may not be able to be broken further for reflection. But it is clear that experiments are necessary. These experiments are the only feedback loops and they should be analysed without emotions attached to those. How should we experiment at every touchpoint (end to end - customer touch points, positioning, pricing, delivery, nps, tech, etc. to customer referrals) at scale with minimum effort? That's where a system comes in. System for experiments which fail? I promised I will use a good f-word …  🤹

“For our purposes, let’s say a goal is a specific objective that you either achieve or don’t sometime in the future. A system is something you do on a regular basis that increases your odds of happiness in the long run. If you do something every day, it’s a system. If you are waiting to achieve it someday in the future, it’s a goal”. 

18 - This is last but certainly not the least of the total 18. I hope all of you go through a journey of exponential scale. In addition to what you learn during scale, it is important that you become something unique after that journey. It's like climbing a mountain every 3-4 years. With consistent steps week over week, you will eventually reach a meaningful destination. Every step you take, takes you closer to a bigger impact. It's all about the frame you put your journey into. Oh, you got another good f-word; nice … 🚍 

“We can learn to reframe our picture of life as essentially friendly even in the face of adversity, we will not only be able to get to yes with ourselves but we will have a much better chance of getting to yes with others. In reframing your picture of life, three practices can help. First, remember your connection to life. Second, remember your power to make your own happiness. Third, learn to appreciate the lessons that life brings you”. 

With this I finished all the pointers I wanted to put forth regarding “what does scaling saas mean?”. In part 4, I will give you rules which will help you apply these. With these 3 posts, I hit three sixes. Should I call it hattrick or triple sixes? 

Picture - 

• Viva - let's walk, it is 6 - 7 kms. This snow slide looks hard and a bit risky. 

• No Daddy, it's just 2 kms. We will save 4 kilometers. I don't know why you always get so scared? Let me go first, I will come back up and then we can go together again. It will be fun. 

• Wait, what … ?

Henry Ford quotes, "One of the greatest discoveries a man makes, one of his great surprises, is to find he can do what he was afraid he couldn't do". 

Was I really scared there?

.....

Swagat Irsale is a Growth and Scale Advocate. He works with start ups and scale ups and helps them grow revenue and build enterprise products which users use.

You can connect with him on Linked in.

https://www.groadv.com/post/grow-revenue-the-journey-zero-to-one-billion-swagat-irsale

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