Scaling too fast is the problem (startup)

Scaling too quickly for a startup is essentially a fundraising (investors, loans) after launch.

Normally after a working MVP based on intensive market research it’s advisable to conduct pilot study/user testing.

Validating an MVP on a small sampled niche is crucial to gather some insights and analytics that can be used to refine and update features based on feedbacks before market ship. Often there can be some sort of startup scaling along the way.

And that’s how you can validate your business model or change.

After conducting an MVP validation and some documented sales as evidence then that’s a business. You’re ready to seek funds/investors.

Funds acts as a booster to maximize profits. Expecting to grow a business solely on scaling alone can have consequences in some way. Keeping momentum with competitors, doing innovations based on feedbacks, managing employees, paying bills and taxes all these requires $. Initial sales aren’t going to change red litmus paper blue.


Let’s say you get a profit of $100 on $500 investment a month.

If someone invests $5000 in your business, you’ll both earn $1100 from $5500 investment.

Are there some lights?
 
Kwangu mifano mizuri ni wework na snapdeal, hizi kampuni zote mbili zine fail kutokana na tooo much money from investors na management ku shidwa ku fanya allocation

Huwa nashauri hata hawa vijana wanakuja ku present idea zao kwamba sustainable growth ni more important kuliko rapidly growth, kuna mtu mwingine unamyima fund kwa sababu unaona huyu ukimpa ela baada ya 2yrs kampuni inakufa
 
Ultimate said:
Kwangu mifano mizuri ni wework na snapdeal, hizi kampuni zote mbili zine fail kutokana na tooo much money from investors na management ku shidwa ku fanya allocation

Huwa nashauri hata hawa vijana wanakuja ku present idea zao kwamba sustainable growth ni more important kuliko rapidly growth, kuna mtu mwingine unamyima fund kwa sababu unaona huyu ukimpa ela baada ya 2yrs kampuni inakufa
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Umeongea ukweli kabisa, references zipo, Sendy ya Kenya scaling too fast and failed. Dash ya Ghana too much money $86+M and failed. So startups wengi sana huwa hawajui kama kuna muda hawahitaji fund bali wanahitaji kujistablize ili wawe prepared na wawe na real need of fund to scale out.

Startup Preseed/Seed hawa hawahitaji hela nyingi za kuscale bali they just need working capital kufanya assurance of their service/products, after sometimes then they need fund to grow. Stage ya nyuma before kutaka fund za kuscale you need Visionary Team, Talented & committed CEO, clear plans and strategies.
 
Kuna Startups nafanya nazo, naona they don't need funding for now but CEO keep talking about fund, fund, fund. Overfunding is business killer. Ukiwa na fund nyingi ambazo kampuni haihitaji ni rahisi sana kumisallocate those funds u will be buying what you don't need because you have purchasing power.

So sometimes ni CEO/Founders wanataka fund lakini startup yake haitaki fund so because yey ndo final decision maker they end up asking for funds but interesting thing, hutawaona wakikopa but they are looking for investors and grants
 
Somo zuri Sana,katika kila biashara Kuna stages of growth, biashara inatakiwa kupitia,endapo one stage or two zikirukwa kwasababu tu ya kutumia pesa ili uvuke hiyo stage ujue tu huko mbele unaenda kukwama kwasababu bado hauko tayari kwaajiri ya next challenge
 
Investo said:
Somo zuri Sana,katika kila biashara Kuna stages of growth, biashara inatakiwa kupitia,endapo one stage or two zikirukwa kwasababu tu ya kutumia pesa ili uvuke hiyo stage ujue tu huko mbele unaenda kukwama kwasababu bado hauko tayari kwaajiri ya next challenge
Click to expand...
Perfect
 
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