Blog

Scalable startup entrepreneurship characteristics: What defines entrepreneurship, small business and a scalable startup? The most impactful aspect of a startup is its ability to scale. In this article, we will talk about the characteristics of a scalable startup entrepreneurship. It helps us differentiate ourselves from small businesses and convince investors about the ability of your idea to give a huge return to the investors. Ultimately, these characteristics clearly help you make a difference and showcase why your idea is worth investing.

Scalable startup entrepreneurship characteristics

The characteristics of a scalable startup entrepreneurship can be laid out in 5 key points below. A scalable startup entrepreneurship is defined as a business that has high-growth and scalable products. The startup follows a similar route with other businesses where the first few years take time to establish product market fit. Once you achieve this fit, your product can grow at a large scale and be replicated across multiple customers. The aim is simple – to sell your services to as many people as possible. It supports exponential growth and fast adoption. The following items talk about the characteristics that help with fast adoption and growth.

1. Large Total Accessible Market shows the scale of your idea for investors
2. Ease of adoption and low attrition rate allows for increased usage and value
3. Unique selling point helps with differentiating from other competitors
4. Low customer acquisition cost help scaling to more markets and geographies
5. Funding and runway helps boost inorganic growth and scale of the company

Large Total Accessible Market shows the scale of your idea for investors

A startup is mostly about its potential and capability to scale. A global large accessible market shows how big your accesible market is. It shows the investors that your product can be ready for widescale adoption. This helps them gain confidence that their investment can yield large returns. From an investors point of view, your accessible and available market are the two most important things in your startup idea for scale. Ultimately, it is all about the hockey curve growth that the investors are after.

Unique selling point helps with differentiating from other competitors

The uniqueness of your idea sets your business apart from the competitors. The more unique this offering, it shows better potential for the success of the business idea. A unique selling point is one of the most powerful scalable startup entrepreneurship characteristics. When you do your market analysis, this helps to create a case on how you will succeed and be different from others. Remember, a strong USP will convince investors better and help them get confidence on the reasons for your success. If your USP cannot be replicated by others, this creates a stronger case for your business idea.

Low customer acquisition cost help scaling to more markets and geographies

Any business will love the idea of a low customer acquisition cost. This means that you don’t have to spend lots of money for scaling your business. Investors love this type of business. Most of these low acquisition cost business are technology based because of its ease of adoption.

Customer acquisition cost is amount of money you spend to get a customer. For an investor, this automatically means that your costs will be low, indicating larger profit margins and EBITDA. Eventually, this will mean huge payouts when you’re considering your exit strategy.

Ease of adoption and low attrition rate allows for increased usage and value

Most founders dread the idea of a churn rate. We all know that getting a new customer is far more expensive than holding on to an existing one. Although churn is natural, it means that you’re losing customers. If the churn rate is greater than the industry, it’s an indicator that something might be wrong with your business.

Funding and runway helps boost inorganic growth and scale of the company

The harsh truth or characteristic of any scalable startup entrepreneurship is the dependence on external funding. Until a startup reaches a stage of self-sustenance, this will continue to be a health check point and characteristic to rely on. Naturally, the longer runway you have, it exudes more trust in your business. This also helps you get more employees joining your company and further rounds of investment for investors. In essence, a longer runway means that the business has a better chance of survival.

References:

Product market fit: https://en.wikipedia.org/wiki/Product-market_fit

Churn rate: https://www.investopedia.com/terms/c/churnrate.asp

TAM or Total Accessible Market: https://www.divestopedia.com/definition/4974/total-addressable-market-tam

EBITDA meaning: https://www.investopedia.com/terms/e/ebitda.asp