Does Your Startup Face a Chicken-or-Egg Challenge?

How to Launch (And Why Scaling Doesn’t Matter)

In the early days of starting up, the ability to scale is overrated. “Scale,” in case you haven’t heard the term, refers to the concept that there are processes in place that are fast, cheap, and repeatable because there will soon be millions of customers who generate billions of dollars of revenue.

For example, if Pierre Omidyar had to test every used printer offered for sale, eBay couldn’t scale. If Marc Benioff had to make every sales call, Salesforce.com couldn’t scale. If James Hong’s parents had to check every picture to see if it was porn, Hot or Not couldn’t scale.

Holding yourself to a mass-scaling test in the early days is a mistake—putting the proverbial horse before the cart. This is akin to wondering if you should start a restaurant because it may be impossible to scale the perfectionism of an executive chef for multiple locations.

How about first ensuring that people within in a twenty-mile radius like the food before working about scaling the restaurant? That is, see if the business will work at all. For example, a company that I advise called Tutor Universe provides tutoring service via smartphones. Think of it as “Uber for tutoring.”

The long-term plan was that students could ask questions about any topic and receive help in under fifteen minutes. However, in the beginning, a critical mass of tutors for every subject didn’t yet exist. Many startups face just such a chicken-or-egg challenge: if you had enough tutors, you’d attract enough students. If you had enough students, you’d attract enough tutors.

What do you do when you’re faced with this kind of challenge? The answer is simple: you cheat! You use your own employees to answer questions and hire tutors in the Philippines (highly educated, English speaking, and cheap) until you can reach a critical mass of a marketplace. Skeptics and inexperienced entrepreneurs might object: you can’t scale if you have to use employees or hire tutors because they are too expensive.

This might be true, but it doesn’t matter. What’s important is that you establish three key points:

• You can get the word out
• Students are willing to install an app
• They will pay for help.

Your priority, in short, is proving that people will use your product at all. If they won’t, then it won’t matter if you can’t scale. If they will, then you will figure out a way to scale. I’ve never seen a startup die because it couldn’t scale fast enough. I’ve seen hundreds of startups die because people refused to embrace their product.

This post is a tiny part of Guy Kawasaki’s latest book, The Art of the Start 2.0. Read it and reap…

Check out other recent LinkedIn Influencer posts by Guy Kawasaki:

• Choosing an Advisor: Separate the Contenders from the Pretenders
• How to Establish Your Brand Message
• How to Be a Demo God

About: Guy Kawasaki is currently the chief evangelist of Canva and the former chief evangelist of Apple. He's the author of thirteen books including The Art of Social Media: Power Tips for Power Users, APE: Author, Publisher, Entrepreneur — How to Publish a Book, What the Plus!, and Enchantment: The Art of Changing Hearts, Minds and Action. Guy shares enchanting stuff on the topics of marketing, enchantment, social media, writing, self-publishing, innovation and venture capital.

His latest book is The Art of the Start 2.0. (hardcover or Kindle)