Unscripted: Life, Liberty, and the Pursuit of Entrepreneurship pdfdrive com

THE THREE SCALING SYSTEMS
You can scale anything: a laundromat, a retail store, rental houses, your
husband’s secret mustard recipe, anything. The question is, how difficult will it
be?
There are three basic scale strategies, each with their own internal challenges.
They are:
A customer strategy
A chain/franchise strategy
A channel strategy
#1) The Customer Strategy
The most preferred scale method is a simple customer strategy. A customer
strategy sells directly to your customer and in volume: foot traffic for retail
stores, eyeballs for websites, users for software, or players for mobile gaming. A
customer strategy is only limited by the market size and the available scaling
economy.
Your Product -------> Your Customer
For example, a tennis website that sells tennis equipment theoretically has a
maximum market size based on the total number of tennis players in existence.
Its scaling economy is simply server capacity and bandwidth. On the other hand,
a local shoe repair store on Elm Street has a maximum market size limited to
people living in the local area AND those who need a shoe repair. The shoe
business’s scaling economy is also limited to staffing and how many soles can be
fixed in any given hour.
Brick-and-mortar stores typically have challenging scale economies, while
web ventures do not and, hence, are the most competitive. Nowadays, every
teenager has some kind of app on the app store. Hot Internet startups find
money easier than calling Geico and saving 15 percent. These enterprises with
prolific scaling economies, namely digital-based ventures, attract the crowds and,
therefore, are the crown jewel of pursuit. But don’t be fooled: that doesn’t make
them better.
#2) A Unit Strategy

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Every so often, I’m asked, “Where are the best opportunities?” When I don’t
say something Internet or mobile related, shock follows. Within a private forum
at 
Fastlane
, we have a category for ideas needing executioners. Within this
depository, entrepreneurs post their foregone ideas due to other commitments.
I’ve posted a few ideas, and would you guess most have been brick-and-mortar
based?
There is tremendous opportunity in local hardlines, brick-and-mortar
businesses where many people (especially young people) don’t consider because
they don’t dwell in a digital ecosystem. You pass on starting your entrepreneurial
journey making $5K/month in the local community and instead chase after
soured, low-hanging fruit based solely on a tantalizing scaling economy. I’m
gonna start a mobile app promoting my fitness tips! Yippee!
Don’t be the entrepreneur who overlooks a great local opportunity just
because of a challenging scaling economy. Don’t misinterpret expected value; it
exists when you can see the brushstrokes that paint the picture. And that picture?
It’s a unit strategy.
A unit strategy is a local business iterated in multiple markets through
replication, chains, network marketing, or franchising. It takes a singles playing
field and unitizes it so homers can be hit. In our laser tag business, a unit strategy
would 
Fastlane
the business where challenging scaling economies are overcome.
A 
unit 
strategy 
could 
be 
applied 
to 
products 
(network
marketing/brands/licensing), real estate (replication), retail stores (chains), and
restaurants (chains/franchising). Our laser tag facility would benefit from a unit
strategy.