90% of start-ups fail while scaling up...this intuitive model helps you check whether you are ready for scaling your business!

1. from one orbit to the other…
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2. Key Skills – Business Catalyst, Ideation, Technology, Management,
Operations
 Several years of experience in start-ups as well as established
companies like Sling Media, Ittiam Systems & Motorola
 On the jury and mentor panel for several business plan
competitions e.g. Power Of Ideas (Economic Times), White Knight
(IIMK), Eureka (IIT Mumbai)…
 Contributed to MPEG-4 standard as a member of MPEG committee
 Hold two patents on video technology
 B Tech Electrical Engineering IIT Kanpur 1992
@manish_saarthi
http://in.linkedin.com/in/smanishsinghal
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3.  Building a scalable business
 Are you really ready for Scaling?
 Pointers to Scaling
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4.  Based on experiential learning
 Typically every business gets fueled by the
passion of the entrepreneur; however as
time goes by, there is more need for
structure
 Provide a structure for various stages of
growth
 Different sections will be useful for different
companies depending the stage they are in
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6.  Started in 2005
 Key offering: business class travel on short
hauls at the price of economy class
 Spent huge capital to lease aircrafts and
launched operations
 Closed in 2010
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8. Customer
Discovery
Pivo%ng
Company
Valida5on
Customer
Valida5on
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9.  2005: Based on a personal experience, Phani
realized the in-efficiency in booking bus tickets
 2006: Developed a software for the bus
operators to pool in the vacant seats
 No takers! Not even for free…
 Late 2006: Pivoted the idea from selling
software to becoming a sales channel for
tickets!
 Rs 5 CR in 2008, Rs 30 CR in 2009, Rs 60 CR in
2010…
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10. “Your
Store,
Your
TV,
Your
Ads”
2010
October
November
December
• Idea!
• Func5onal
• Market
ready
• Survey
prototype
prototype
• Business
plan
• IT
BHU
• Pilot
–
Khivraj
incuba5on
Bajaj
2011
January
Feb/Mar
May-­‐June
• SOH

Instore
• Jugaad
H/w
to
• Remote
Delivery
• Pilot
–
Lifestyle
demo
• Web
based
control
• Demo
–
Maru5/ • Paying
customers

• Legal
Opinion
Hyundai
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11. Linear Model Iterative Model
 Product centric  Customer centric
 Long product /service  Shorter cycles of build –
development without validate – build –
real customer touch validate…
 Lack of on-the-ground  Strong involvement of
customer development customer at all stages
right from the start from start to finish
 Typically tends to take  ‘Build the business’ before
more capital ‘Build the company’
approach
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13.  1997 - Started with one store in Chennai
 2000 - ICICI ventures invest in Subhiksha
 2002 - 120 stores across Tamil Nadu
 2004 - Changes the mantra from
consolidation to scale
 2007 - 1000 stores across the country
 2009 - in bad shape with dues over 300+ CR
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14.  Every Business has one or more lines of
revenue / offerings..
 Each one of them needs to be treated as
separate mini-businesses , called Business
Lines
 Please evaluate each Business Line
separately with the use of Dip-sticks
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15. Have you crossed the CHASM?
Main Stream
Market
C
Enthusiasts & H
Early Adopters A Laggards
S
M
Product / Service Adoption Lifecycle
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16. 100
80
60
% Leads
40
20
Knowns Known of Unknowns
Knowns
Business Cycle
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17. Business Cycle Validation
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18. 100
80
% Customers
60
40
20
Contact Need Proposal Negotiation Fulfillment Support Repeat
& Pitch Identification
Business Cycle
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19. Profitability per sale
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20. % Customers
100
80
60
40
20
Substantial Marginal Break Even Marginal Desired
Loss Loss Profit Profit
Profitability per Sale
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21. Customer Support Effort
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22. 100
80
60
% Team
40
20
Support for Enhancement of Future
Current Offerings Current Offerings Offerings
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23. Product / Service Digression
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24. 100
80
Product/ Customer
% Customers
60 Service Need
40
20
0 20 40 60 80 100
% Match
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25. Cash Flow Predictability
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26. 3
Normalized Revenue & Order Book
2
1
Quarter/
0
Month
-1
-2
-3
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28.  Go To Market Strategy
 Building Organization & Processes
 Capital Planning
 Better money is the Customer
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30.  Phase1.0
 You have developed the offerings
 Tested their efficacy in the market
 Have some paying customers
 Phase 2.0 Scaling Process
 Scaling of the current business
 Addition of new business lines
 Market Identification for each BL
 Identify your target segment for each Market Segment
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31. New
Product
Re-invented Product
New Market
(Re-segmented Market)
Old New
Market Market
Re-invented Market
Existing Market
(Re-segmented market)
Old
Product
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32. New
Re-segmented Market New Market
Product
Google+
Facebook, Linkedin,
Metro Service in BLR
Amazon
Online shopping
Multiplexes at their launch
iPOD / iPAD
time
Multiplexes
Old New
Market Market
Volvo service in Bangalore
Low cost airlines
Deccan Airlines (when it
TVs/Fridges/Washing
started)
Machines/White goods
Flipkart
Existing Market Old Re-invented Market
Product
*
Some
examples
may
exist
in
mul%ple
quadrants
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33. New
Re-segmented Market New Market
Product
Customer Adaption / Non
Competition can catch up fast
consumption
Staying ahead of the race
Other Startups
e.g. G+
e.g. Seventymm (online DVD rental)
Old New
Market Market
No customer need in the new mkt
Crowded Space – Margins &
Customer Adaption / Non
Market Share always under
consumption
pressure
New products
e.g. Mobile carrier / handset,
e.g. Kellogs (at launch), Paramount
hotels
Old airways
Existing Market Product Re-invented Market
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34. New
Re-segmented Market New Market
Product
Clear Distinction for the new Build new use case scenarios and
product wrt old ones for gaps evangelize and how it can benefit
e.g. G+ created noise around consumer
privacy & circles (to distinguish e.g. Facebook showed a way to
from FB) connect with people around the
world, Linkedin did the same for
Old professional network New
Market Market
Typically it is cost / feature race Targeted customer education about
GTM is largely based on new possibilities / options
communicating differentiation e.g. Deccan introduced Rs 1/- ticket
Big ad budgets to appeal to the railway customers
e.g. mobile carriers
Old
Existing Market Product Re-invented Market
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35. Market
Customer Market Positioning Demand Creation Risks
Type
Cost of
Create & Drive
Existing Known Known Differentiation creation &
Sales
market entry
Customer
Long
Unknown; Define new Education;
evangelism
New Unknown critical to market, need Convert early
& education
define & solution adaptors into
cycle
customers
Educate users
Unknown; Redefining
Known what has Market &
Reseg- critical to existing
(Most changed in the Product
mented define market &
Likely) market; Drive redefinition
differentiation
sales
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36. Price Product Variables
 Allowances and Deals  Quality
 Distribution and Retailer  Models & Sizes
mark-ups  Packaging
 Discount Structure  Brands
 Service
Promotion Variables Place Variables
 Advertising  Channels of Distribution
 Sales Promotion  Outlet Location
 Personal Setting  Sales Territories
 Publicity  Warehousing System
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37.  Identify target customer segment clearly and stick
to it for the current product
 You can't be everything for everyone
 It maybe better to dominate a niche with the given
resources
 Evaluate most cost effective route to the customer
 B2B, B2C, B2B2C…
 Treat existing business units and new businesses as
two different companies
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38.  Build & Leverage your networks
 Make LinkedIn and other social business
networks work
 Social Media should be an integral part of
your marketing strategy
 Build & evaluate feedback loops continuously
 CEO is the best CMO for initial stages of
growth
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40. FIRST EMPLOYEES
Skilled, Passionate people
Common Goals
Shared values
Build your model
CORE TEAM
5-6 key team members
Passion, passion passion
Common values, Share the goals
Ownership, Ready for uncertainty
Hire for attitude, Train for skills
FOUNDING TEAM
Core skills in the team
Good advisory board which cares
Common values, shared company vision
1+1=11
Do not mix personal/professional
relationships
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41.  Make and BE a good foundation, support
everyone....
 Communicate
 Be honest and don’t fake values
 Meet every person you get in your company
 Answer difficult questions yourself
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42.  Almost every start-up has a Functional Structure to begin with
 easy to implement & easy to assign team members based on their
skills
 This model begins to lose its efficiency as different Business Lines
begin to mature
 Business Unit Structure
 Each mature Business Line hived off as a Business Unit headed by
the BU-head with P/L responsibility
 Shared Services across BUs to serve common needs like HR, Finance
etc
 Leverage entrepreneurial energy for cross functional initiatives and
not for causing diffused ownership
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43.  Keep processes scalable even in the
basic business model
 Processes are as important as
innovation
 Invest in processes for the next 3 year
plan
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44.  Plan for T+2 for people, process, technology
 Review and modify your plans rigorously &
regularly
 Do not overinvest in technology while under-
investing in people
 Always overinvest in processes
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46. Source:
Wikipedia
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47. Type
of
Advantages
Disadvantages
Funding
FFFF
/
Entrepreneurs
free
to
use
Limited
advisory.
Only
Angel
money.
Typically
the
only
monetary
help.
Equity
risk
capital
available
in
pre-­‐ Dilu5on
can
be
heavy
if
not
revenue
stage
handled
right
VC
Larger
chunks.
Advice
Dilu5on,
Corporate
Structure
Private
Very
large
chunks
Mainly
available
to
large
Equity
businesses
Debt
No
equity
dilu5on
Typically
requires
collaterals;
Ability
to
repay
EMIs
IPO
Typically
highest
valu5on
Equity
dilu5on;
market
risks
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48.  Think through on which investment is right
for you
 Milestone based capital plan
• Raise only as much as you need to get to the next
milestone
 For cash-flow businesses, debt capital is a
great option
Better money is the customer!
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49.  All entrepreneurs have to decide what scale of business
they want to be in
 Scaling up can be designed in from the start, however
needs to be focused on at the right stage
 With the right model, any business would scale naturally
in steps
 Scaling up requires three main dimensions
 Go To Market Strategy
 Building Organization and Processes
 Capital Planning
• Best Money is the Customer
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50. Every business aspires to
grow and they will,
they only have to find a way
of doing it sustainably!
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51. Enabling Scaling Technology Executive
Startups Businesses Advisory Coaching
From concepts From talented
From Ideas to From one orbit
to effective individuals to
Business to the next
solutions inspired achievers
Leveraging your The key to scaling is Developing quality There is no dearth of
strengths, we shape to build sustainable, products requires a talent. The challenge is
your idea to help innovative business balance between to unlock potential and
create a viable models & features, make it productive to
business & execute it continuously improve technology & achieve meaningful
on them architecture results
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52. Can we be your Saarthi?
manish@saarthiconsulting.com
www.saarthiconsulting.com
www.facebook.com/saarthiconsulting
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