In the past five years, the pace of change in the consumer ecosystem has been exhilarating. The need for customer-centric businesses to be digitally agile, physically accessible, and highly responsive across channels has led to emergence of unique business models. In this demanding environment, how should an entrepreneur structure, set up and scale up their business model?
The New-age Business Model
I usually use the analogy of a race car to depict the digital-first business model. The fuel, engine, kick starts, lubricant and turbo boosts – all must work in sync to power you to the finish line. And you, the founder, are the F1 driver… without a sponsor! You're living on the edge, you don’t know what’s going to come your way. Yet, you need to win the race. Is it all just hustle and a Hail Mary?
If you break down this to building blocks; you will probably arrive at a list of attributes as:
- A customer-centric, transparent, purpose and value-driven proposition
- Managing touch points across channels/marketplaces to deeply understand audience needs and behavior
- An agile, scalable supply chain to respond and deliver on growth levers
- A data-led system to react and analyse issues/situations in real-time
- A culture and practice of innovation to leverage market opportunity
- Seamlessly integrating people, processes and systems that deliver value
The question to ask is whether scaling up is a capability that develops over time, or a muscle to work on right from Day One. Spoiler alert: There’s a case to be made for both.
“Hustle, but get your fundamentals right.”
FS Life (formerly Fable Street) founder, Ayushi Gudwani observes that building a business is initially about the hustle, but it also needs you to get your fundamentals in place. In the case of Fable Street, it began with the question “Market kya hai?” and what consumers sought. That led to insights like sizing and fit being crucial , which helped shape what to build, its USP, and inherent scalability.
A business needs to be built for agility – and to deal with the unexpected – COVID-19 outbreak, Demonetisation, GST in an unorganized supply ecosystem. The list is long.. Therefore, your team, too needs to be driven, and open to adapt to the dynamic ecosystem. Fundamentals do come to play in these critical situations.
“Solve the problem, and everything else will follow.”
Gynoveda co-founder, Vishal Gupta, was convinced that the brand was a 10X solution to a very prevalent problem of fertility and menstrual health issues. A pain point marred with social taboos. He believes that if you focus on building a business model to solve a problem and create value, the money will follow.
The Science of the Pivot
Often, internal and external factors can reorient your business. COVID, for instance, led FS life to pivot from office wear to comfortable and stylish Western wear. There are some systemic reasons why this transition worked. Founder Ayushi points out that the fundamentals were already in place:
- Strong, extremely agile supply chain
- Low inventory approach
- Just-in-time technology
- Consumer intelligence
- Data insights
Once FS life pivoted successfully, the team was able to use the formula to grow from one brand to a house of brands.
"When you're forced to step back and reflect, you can actually articulate those building blocks more cleanly, and then use them to transition as you go back to business model wireframe discussion. So today we are much more methodical and thoughtful about what those blocks are.”
The Art of Letting Go
Gynoveda addresses menstrual health issues, which can be extremely sensitive. The customer team often faced problems that were completely unexpected. Co-founder Vishal explains that a key aspect in growing the business was to let go of control. And equally vital, not strive for perfection. That approach built tolerance in the Gynoveda system.
“I would build systems and processes to be able to review it periodically so that it doesn't lose orbit and it doesn't really tailspin into something difficult to reacquire.” Vishal Gupta
Just Do It!
So is there a definite starting point for an entrepreneur? Ayushi sums it up simply: “Kar daalo!” Launch your business after considering costs, execution etc., but you only find out the practical aspects when you actually get into execution.
“I took three months from the photoshoot to launch of the business when the business was ready to launch. Because I was striving for perfection. “Yeh image theek nahin hai. Isko change kar do. Yeh banner font theek nahin hai.” And all of that, to realise that, you know, that was lost opportunity and lost time.
Vishal on his part, believes in focusing on the process or the unit economics, rather than obsessing over how big the business can become. When you are really pulling the business forward – that’s what a scaleable business model needss. Entrepreneurs, he stresses, have one job – to build systems.
If I had to distil my experience and learnings from successful founders on scaling up, they would be:
- Just do it! Only then will you learn what works, what doesn’t
- Fundamentals are the core; Set them up right one-time and build the growth bolt-on on top of it
- Cede control at an opportune time
- Start vesting ownership in your team; Co-opt them to build on the Company’s long term vision and let them create magic
- Keep the consumer at the core of what you've built, at every stage of your journey; Consumer love stiches many glitches in a business.
- Remember, it’s not one-size-fits-all; what worked for them wont work for you; what worked for you now; won’t work 2 years from now; Scale, adapt, refine – The engine must operate continuously.
For more insights on scaling up, do watch the entire session of Whose Brand Is It Anyway?!