🔥 The Overlooked Key to a Successful Scale-up 🔥
The answer revolves around the “extrapolation” stage.
Businesses typically go through these stages:
1️⃣ Exploration mode - Testing their solution and the market
2️⃣ Exploitation mode – Fine-tune their business models
In the middle lies another phase, the extrapolation stage where companies both explore and exploit.
The extrapolation stage is key where companies need to learn how to do economies of scale while increasing their revenues exponentially.
Some of the key reasons most businesses never scale and often fail:
→ Not understanding who their ideal client is
→ Accelerating on a go-to-market expansion too rapidly
→ Placing people in the wrong roles
→ Accumulating debilitating technical debt
An example company that perfected the extrapolation stage is King Digital Entertainment, the developers behind the hit game Candy Crush Saga.
Between 2012 and 2013, the company achieved:
🔺 12x increase in revenues
🔺 6x increase in costs
These fascinating results led to a 70x increase in operating income, from €10.5 million to €716 million.
Have you heard of the “extrapolation” phase before? Do any other company examples come to mind?
