Investors Are Looking For Scalable Startups But…

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By Dzhingarov

So many entrepreneurs out there believe that the most important thing is coming up with something that is innovative. Businessmen that start their own company believe that they came up with the next big thing but it is really hard to be sure that this is the case. Investors are always looking for a scalable startup. This basically means that there is a need to have a business plan that showcases the fact that scalability is possible.

scalable startups

Things To Remember

In the evolution of any company there is a situation when a buyout offer appears, in the event that everything is going great and profits are growing. This is the moment when you need to figure out how scalable the company is. If scalability is really high, you can end up making a lot more money as an investor if you do not agree to the buyout. With this in mind, it is really important that you are patient and that you analyze the situation your company is in. If you see that scalability is high, you need to get venture capital and simply grow, expand. This is true even when you started in a garage and you are offered $1 million for the company. Business is always about being strong and realizing the situation you are in.

Defining A Scalable Startup

  • Offers a product that has a high possibility of being in-demand in the future.
  • The personal goal of the owner should not be to remain small and make as much money as possible. Companies that are started with the idea of flipping will usually not be too successful, even if they are scalable.
  • There is a possibility that the company can eventually end up growing to a company with a turnaround of millions of dollars.
  • The company uses agile and customer development in order to be sure that the business model is well-developed. This reduces risks while allowing you to go really high.
  • The early employees and co-founders share the vision of the owner.
  • Constant growth is established on a month-to-month basis.
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In many situations a sellout means that another person will define the initial vision of the founder. However, during these moments you will notice the fact that some of the company will leave. Managing the situation properly is very important.

Thinking About Huge, Not Big!

The scalable startup will take one idea and will be based on a repeatable and scalable business model. You do not want something that will be big. You need to go for something that will be huge. You can do that by entering a market that is large and constantly taking shares away by offering something new that is actually needed. In most cases the scalable startup requires external capital and founders need to be experienced in order to bring in the investors that can actually offer the necessary capital.

The Internet And Scalable Startups

Because of the current state of the internet, we now have access to new innovative business models. The problem is that not all the web businesses can scale really well. The internet did make it easy for startups like Facebook and Google to succeed and opened the doors for various smaller web based businesses without scalable opportunity. Do not believe the fact that you can scale any site to a huge profit. That is not the case.

Is The Scalable Startup For You?

Although investors do prefer a scalable startup models, they will also invest in small businesses with a high chance of success. In many situations a startup will turn into a small business. Finding scalable opportunities is difficult and may force you to spend so much time on research. Make sure that you analyze yourself with honesty in mind. If you are not prepared for the struggle associated with a scalable startup, it is better to consider something else.

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