What is Premature Scaling

Startup Genome cracking the code of innovation WHAT IS PREMATURE SCALING? The actual stage of a company is determined by its interaction and response with its customers. Premature scaling happens when a firm's behavior does not conform to its actual stage. This is typically a result of not synchronizing the five core operational dimensions of a startup: customer, product, team, financials and business model. LEGEND in red, a startup that scaled prematurely. www.color.com in green, a startup that scaled properly. www.rally.org STAGE STAGE STAGE 3 STAGE 4 STAGE 5 STAGE 6 DISCOVERY VALIDATION EFFECIENCY SCALE SUSTAIN CONSERVATION ACTUAL MARMER STAGE This is the progress of the i startup based on its interaction with customers. This is Color. We think they This is Rally. They are consistently at the effeciency stage. are at the validation stage. MARKET CUSTOMER RESPONSE ENVIRONMENT DISCOVERY VALIOATION EFFEC ENCY SCALE SUSTAIN CONSERVATION BEHAVIORAL MARMER STAGE This describes the behavior i Big PR campaign. of the startup along its five core dimensions. CUSTOMER inconsistent Understood users needs. Incomplete product, poor user experience. PRODUCT Rebranding after P/M Fit A very big team. 30+ TEAM Waited for P/M Fit before inconsistent growing the team. A lot of money. $41 Million FINANCIALS Did big Series A round only inconsistent after P/M Fit. No business model. BUSINESS MODEL Seamless part of app SOURCE: designed by. Startup Genome THE MADRAY All logos are respective trademark of companies mentioned. All Rights Reserved. cracking the code of innovation www.themadray.com www.startupgenome.cc STARTUP ORGANISM PREMATURE SCALING PROPER SCALING