What does premature scaling mean?
The Startup Genome Report defines premature scaling as 'focusing on one dimension of the business and advancing it out of sync with the rest of the operation'.
Examples of premature scaling are as follows:
- overspend too early on customer acquisition;
- hire too many employees,
- focus too much on engineering at the expense of customer development;
- raise too much money too early;
- focusing too much on profit maximization too early;
- over-planning, executing without a regular feedback loop;
- not adapting business model to a changing market;
- failing to focus on the business model
Each dimension of a business can be scaled prematurely, such as the customer, product, team, financials, and even the business model.
Definition of scaling
Focus Pointe Global defines scaling a business as 'setting the stage to enable and support growth in your company'. In other words, it is for a business to grow or expand in a proportional and profitable way.
Moreover, Katherine Gustafson of Lighter Capital explains that when companies scale, they add revenue at a faster rate than they take on new costs.
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Last edited on 16 April 2020.