Recently I wrote about resource constraints at start-ups and how important it is to invest resources wisely, and with scale in mind. Well, last week life took over. We're in the weeds of our system landscape, where some of us are working hard to satisfy investor demands for a reconciled balance sheet and income statement, while others struggle keeping track of our inventory as we use spreadsheets and do procurement by e-mail. As if that wasn't enough, we're planning to roll out a pilot that will require significant attention exactly because it will not yet have full systems support.
So did we do it all wrong? I guess only future will prove it, but I don't think so. Everyone so far has done what they could and developed the tools necessary to support their function. Sales introduced a third party system to manage clients, operations developed spreadsheets to simplify their bespoke quoting process and uses other spreadsheets to capture important information on procurement and inventory. And accounting, well accounting is at the end of the chain… and therefore naturally takes whatever it can get and tries to make the best out of it.
Thinking back of my own (rather short) venture 10 years ago, I realized it was no different. If you start a company, systems and processes aren't the most important thing… getting customers' needs satisfied and the business off the ground are. There is a point however, where the business grows too big and the systems and processes come in place to keep it manageable - that's the point we seem to have reached now.
At the same time, this presents a challenge: To grow your business, you need to have the solutions in place now. But to invest wisely in solutions that allow for scale, you need time. It is almost as if you're always running behind, while planning ahead.
So I realized today there is a limitation to the "invest wisely with scale in mind" approach. If things are at the point where you put unnecessary risk to your business, one needs to get things in place quickly. Hence, one should look into the most prevalent solutions and quickly make a call on two aspects. Firstly, whether the solution at hand is sufficient to do what is required right now to keep the business going. And if so, secondly, whether choosing that solution now won't significantly limit the options to move away in the longer term. If both questions are a yes, go for it.
The downside of this approach is that you will most likely buy the option with a little too many accessories, which you won't need, and hence not have the most cost efficient solution. Also, you may find out later on that some very specific detail to your business is not covered by the solution, which requires you to upgrade or migrate at some point down the road. Still, rather than putting your business on the line by not making a decision and waiting for the 100% analysis of the "right" choice, you'd better go with the 70% certainty and keep the business going.
Does that question the approach of "building for scale"? No, I think it is more of a nuanced way to execute on that rule and figure out what matters for scale vs. what matters now.
