In recent years, several startups ditched the disciplined approach to growth and went for the growth-at-all-costs model. Examples such as Sendy and Twiga, among others, are a testament to this. With this “Go Big or Go Home” approach, characterized by Reid Hoffman’s book “Blitz Scaling,” those who have not yet achieved sustainability now have to …
With this “Go Big or Go Home” approach, characterized by Reid Hoffman’s book “Blitz Scaling,” those who have not yet achieved sustainability now have to make significant changes to their business models, with some even shutting down.
This strategy involves raising significant capital, scaling rapidly to achieve market dominance, and then optimizing the business model. Uber is a prime example of this approach. However, this method requires ample capital and investor patience, as it can take time to optimize the business model.
On the other hand, the “Slow and Steady Wins the Race” approach entails growing a company gradually without taking substantial risks. This conservative method focuses on sustainability through internally generated funds. While this approach looks like it may prove successful in the long run, it does not always work in a competitive global market where international companies are constantly expanding into new territories.
The way forward lies in striking a balance between these two approaches: “Go Big, but Be Ready to Shift When the Tune Changes.” This middle ground involves considering unit economics from the outset and building towards a sustainable business while focusing on growth and scaling. Founders should always have a Plan B if funding slows down or market conditions change.
For those founders who were all in the Go Big or Go Home way of doing business, the time has come to swallow the bitter medicine. This is necessary for plain survival to see another day. The founders and their advisors have to take action as fast as possible without perfect information. In the current scenario, it is better to cut too close to the bone and correct course later rather than wait for perfect information, run out of cash and go out of business altogether.
In conclusion, adopting a balanced approach between aggressive growth and steady progress can help startups navigate the challenges of today’s competitive business landscape. Remember to “Go Big but Be Ready to Shift When the Tune Changes” to maximize your chances of success.
By Stephen Gugu- Principal InVhestia Africa and Co-Founder Viktoria Ventures