Scale Up Your Startup: Tips for a Successful Venture
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This decade began with a myriad of exciting technologies to explore, such as AI, AR, and clean energy. Some says that there’s never been a better time for entrepreneurs to start their own businesses. Let’s look at how to scale up your startup.
Estimates are that entrepreneurs create more than 305 million startups every year. More than half of them are technology- related. But experience tells us that most startups will not succeed. Half will fail by their third year.
Issues can pop up when a startup attempts to scale up its operations to jump from the laboratory to the real world. Some of the most frequently seen factors include lack of funding, loss of focus, changing market needs, and being overtaken by competitors. It’s a fact that many promising startups fail to launch. The article provides steps a startup can take to improve their chances of being one of the exclusive 10%.
Forbes recently spoke to Dr. Doron Myersdorf, the Founder and CEO of StoreDot, a five-minute extreme fast charging batteries for electric vehicles. Dr. Myersdorf provided some tips for startup scale up.
Prepare to Scale Up With a Strong Ecosystem
Dr. Myersdorf believes that the most important framework for any startup is to create a strong ecosystem. The ecosystem must include strategic partners and investors. He explains that this should be as holistic as possible and include stakeholders from every part of the industry. Many technology developers gravitate toward a “silo” mentality. This mentality forces them to concentrate all their time and effort into developing the best version of their product. But then they realize that it doesn’t meet the needs of the customer or isn’t compatible with the wider market. The more feedback loops a startup has, the more likely they are to scale up successfully.
Prove That You Mean Business
It takes a bit of time to develop a solid network of partners. This step is reliant upon a startup’s ability to convince potential partners that they have the right technology with which to scale up. This can be difficult, especially in the early stages when the startup can’t produce full product samples.
Dr. Myersdorf explains that when his startup began, there were a lot of people who didn’t think that five-minute charging of electric vehicles would ever be possible. To overcome this, he decided to create a series of demonstrations to prove the validity of his technology. At that time, StoreDot was several years away from being able to charge an electronic vehicle (EV) in five minutes. As a result, he decided to prove the technology worked in a small way—by charging a mobile phone in one minute. This provided definitive proof that XFC (extreme fast charging) was possible and also helped StoreDot overcome another major scale challenge that many startups face: securing a manufacturing partner.
Find Your Startup’s Manufacturing Match
Another scale up tip is to find a manufacturing partner. That partner must share an entrepreneur’s vision and is ready to invest the necessary funds to take it from the lab to mass market is a critical and daunting challenge for a startup. This means asking a company to take away time and resources from its already successful business to focus on a new venture, which typically has just a 10% chance of succeeding.
The extent and size of this challenge depends on the industry. The semiconductor industry, for example, has created the foundry model, which is an entire manufacturing model. This foundry model provides a quick way to market for new technologies. But the foundry model in semiconductors is the exception not than the rule. Dr. Myersdorf said there was nothing like this in the battery technology market when he was trying to create the first pilot lines of extreme fast-charging (XFC) technology.
Dr. Myersdorf explains that his company was introduced to our manufacturing partner — of several years now — by one of its strategic investors. Their CEO shared our belief that XFC was crucial to unlocking the full potential of EVs by overcoming range and charging anxiety, and with the evidence provided by our mobile phone demonstration, he was convinced that ours was the best technology to invest in. StoreDot’s partnership with EVE has allowed the company to launch several iterations of its technology. Moreover, each time this has been accomplished, the startup finds innovative ways to demonstrate both the viability and end-user benefits of its solution.
To Scale Up, Reduce Your Cost of Entry
Finding ways to manufacture products as cost-efficiently as possible is important for any company; however, for a startup, it can mean the difference between success and failure. For some startups, adopting this mindset may mean taking their R&D process back several stages. But if they have the right talent within their business, it can be accomplished. Moreover, in doing so, they will make themselves more attractive to potential partners and improve their profitability in the future.
Build Your Supply Chain
One last scale factor that can poise a startup as an attractive partner is establishing sound supply chains. This is vitally important for those companies that operate in high-tech industries that depend upon components that are in limited supply. A startup could have the best product in the world, and a manufacturing partner that is ready to send it to market, but this fail if they don’t have the raw materials needed to move to mass production. As a result, it may be tempting for startups to pour their resources into R&D in the early days of their journey, but it’s also important to start developing those all-important supply chains from the start.