ASSETS FOR SCALING
What are assets for scaling?
Once a new venture has gained sufficient traction with customers and is starting to generate fees (product marketing fit), leaders focus on accessing the assets needed to scale. There are three types of assets for scaling: customers, capabilities, and capacity.
- Customers: An emerging business needs a customer base, sales channels, and sales teams to provide the market reach necessary to drive revenue. Decisions about go-to-market assets and their configurations are based a data developed during the incubation phase, which should have validated that you are addressing a problem that customers are willing to pay to solve and that your solution is preferable to available alternatives. In addition, you will need to know how customers want to buy and what will influence their decision to buy.
- Capabilities: Capability assets include people with the right skills and talents, together with the practices and processes necessary to deliver on customer commitments. A capability could also be a proprietary technology, a product, or business model, that enables a new venture to deliver on its value proposition. The capabilities the venture draws from early on are rarely sufficient to scale the venture. You need to determine the combination of existing and new capabilities needed to deliver the value proposition, and figure out how to ensure consistent access to these capabilities at scale.
- Capacities: To manage a business operating at increasing volumes, new ventures need to develop capacity in terms of fulfillment, logistics, manufacturing, customer service, call centers, and so on. This is a critical point for a venture because it must expand from operating in pilot mode, with a few highly engaged test customers, to addressing the total market opportunity with many customers they do not know. Thus, the scaling path must anticipate the major stress points that are looming, such as meeting customer demand, processing customer returns, and supporting solution implementations. You will need to prioritize and sequence capabilities based on when they will be needed.
Why is clearly identifying the assets for scaling important for corporate innovation?
Clearly identifying the assets for scaling is important for corporate innovation because it enables leaders to:
- Identify the critical assets they need to rapidly grow the business,
- More deliberately sequence steps from an incubated new venture to a fully-operational revenue-generating business (a scaling path), and
- Decide how they will access assets- leverage from the core, build, buy or partner.
Uncertainty can be high for a new venture to commit to a definitive plan, so leaders can develop options for scaling paths they could pursue, enabling them to pivot as they learn more about customers and partners. Identifying assets and figuring out how to assemble them along a scaling path can help venture leaders paint a picture of how they plan to grow the business.
What is the difference for accessing assets in corporations vs. start-ups?
The difference for accessing assets in corporations vs. start-ups is that corporates have existing assets that can be quickly leveraged by a new venture, particularly an existing customer base. Corporate ventures can also access the firm’s balance sheet to bulk up quickly- buying assets to achieve a bigger footprint in the market or to acquire a range of ready-made capabilities.