Moving past early stage and the challenge of scalability 10: building for the larger context of business and marketplace ecologies

This is my tenth installment in a series on building a business for scalability and long-term success (see Startups and Early Stage Businesses, postings 96 and following for Parts 1-9.) So far I have been discussing scalability from early stage on, and the role of business models in mapping out and preparing for success at a larger scale. And with Part 8: web 2.0 business models and Part 9: supply chain-ready business models I began to explicitly discuss the issues of scalability and growth potential in the emerging context of ubiquitous online and telecommunications interconnectedness that every business is coming to face, and no matter how locally oriented in focus their intent is.

I have been discussing scalability and potential for business growth as they are shaped by connections to the marketplace and to partner businesses. I widen that discussion here, bringing in what has to be considered the single most dominant force shaping businesses, marketplaces and industries and both now and for the foreseeable future: change as an ongoing and rapidly advancing factor.

• Our increasingly fine grained, real-time, ubiquitous interconnectedness have simply made any potentially positive change diffuse out and impact more rapidly and significantly everywhere.
• And these same factors have at the same time exacerbated the impact of any potential sources of business weakness or ineffectiveness too.

In a way I began this discussion in Part 9 where I wrote of dynamically changing supply chain systems, organized to meet here and now immediate needs and opportunities in order to capture fleeting opportunity in rapidly changing marketplaces (e.g. seasonal clothing fashions and fads.) But every business, and even businesses in seemingly more stable and mature industries have to be prepared for change, and sudden change – and this may particularly apply to businesses in seemingly fully mature industries. Those are the businesses and industries most at risk of being supplanted or closed down by new innovations that would render tried and true, and even seemingly indispensable, quaint and even obsolete.

So I write here of business ecosystems and of both current and potential marketplaces and customer demographics, and of current and potential business to business collaborators and collaborations. And with change and the potential for rapid change in mind, I note one of the most important observations that I could make in this posting:

• Scalability and growth that capitalizes on its potential can at times simply follow a set linear pattern – and particularly in those mature industries and marketplaces that I cited above as being at risk.
• But when businesses compete in a dynamic and evolving industry and marketplace, the most important parameters for change in effective scalability and growth will all fit nonlinear models – and capacity to identify and navigate their demands can be considered crucial and even defining sources of competitive advantage for those businesses that do effectively grow.

Here, linear growth would perhaps most easily be exemplified by expansion of what amounts to cookie cutter-similar, standardized outlets to a consumer-facing business. As a working example consider a fast food restaurant chain where every outlet in the system offers the same menu in the same way and with similarly standardized storefronts and branding – and with limited opportunity to develop and test out local innovations. Change and changing consumer demands mitigate against this type of stability and this type of linear expansion working. And that type of change increasingly defines the context that 21st century business will need to function, and scalably grow in.

I am going to end this series with this posting, though I am certain to return to the issues and topics I have been discussing here, in future postings and series. Meanwhile, you can find this and related postings at Startups and Early Stage Businesses. You can also find related material at Business Strategy and Operations and at its continuation page: Business Strategy and Operations – 2.