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After generating a unique idea and building a useable and desirable product the next question often follows, is this product scalable?

Understanding the scalability of a product, whether it be a service, model or system, is to evaluate its feasibility to grow, meet market demands and return the investment. Ideally a scalable business can meet these demands whilst increasing revenue with minimal incremental cost. Some products lend themselves well to scalability such as software; which requires the initial cost and expertise to develop but can then be easily duplicated and delivered on a large scale for a low cost. Though businesses will require a different management plans there are some general do’s and don’ts in building a scalable product.

Do . . .

Build a quality product: This goes without saying but a product needs to perform well and be reliable, and these factors need to be retained when it is scaled up.

Keep your margins high! It’s all about economies of scale. A scalable company will be able to reduce their cumulative production costs and increase their profitability with increasing demand and growth. Overheads can be decreased by increasing automation to reduce the labour and staff intensity. Outsourcing can also be a great option when aspects of your business require expertise outside of the company’s realm. In the long term this can be a cheaper and quicker alternative to trying to develop the skills required from scratch.

Use a Minimum viable product (MVP): MVP is a development technique where a product is released in its basic form and supplied to early customers to provide feedback on its future development. This allows the product to be tested for its initial suitability, catch any flaws early and asses whether there is a demand and retention with customers. This path reduces potential expenses lost if a product is released fully developed and fails due to incorrect assumptions.

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Don’t . . .

Rely on freebies! This comes back to the economies of scale. Business plans that cater to the client heavily with free services will be difficult to return investment at a large scale. There is a caveat to this point. Apps are an example of when free vs paid must be weighed up carefully. Though paid apps mostly result in a higher revenue per download, 90% of apps in the apple store are free to download and free apps have a much higher download rate. Free apps are often the best course of action but for your product to return investment monetisation needs to be considered whether this be in-app ads or purchases.

Rely on just yourself …but do rely on your team! You need a competent team that you can count on to make their own decisions. If/when your business scales up you can’t be everywhere at once making all the decisions and running every single operation.

Lose sight of your brand: Knowing what your product and brand is about is an important aspect of any company and you shouldn’t lose sight of this as your company scales up. Though its important to think about avenues of expanding as your company scales, muddying the message can make you less distinguishable, memorable and alter customer perception

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