Scalability in Startups : A Case Study of How Technological Startup Companies Can Enhance Scalability

Abstract: Startups and new businesses are important for the development of technology, the economy, and the society as a whole. To be able to contribute towards this cause, startups need to be able to survive and grow. It is therefore important for startups to understand how they can scale up their business. This led to the purpose of this study: to determine success factors for technological startup companies to increase their scalability. Five areas were identified to have an impact on the scalability of a business, namely; partnerships, cloud computing, modularity, process automation and business model scalability. Within these areas, several subareas were found, which were certain areas of interest within the theory. Together, these subareas helped answer how companies can work with scalability in each area. These areas, and their subareas, went into an analytical model that formed the structure of the empirical and analytical parts of the study. The study is a multicase study, consisting of 15 B2B companies, of varying size and maturity, whom all offered software as a part of their solutions. The study concludes that there are six important factors for succeeding with scalability. An important factor to succeed with scalability is to adopt partnerships, since this will allow for outsourcing, and give access to resources, markets and customers. It is also concluded that cloud computing is a very scalable delivery method, but that it requires certain success factors, such as working with partners, having a customer focus, having the right knowledge internally, and having a standardized product. Further, modularity can enable companies to meet differing customer needs since it increases flexibility, can expand the offer, and make sales easier. The study concludes that process automation increases the efficiency in the company, and can be done through automating a number of processes. Focusing both internally and externally is another important factor for success, by allowing companies to develop a scalable product that is demanded by customers. Lastly, a scalable business model is found to be the final objective, and that it is important to work with the other areas to get there, something that includes trial and error to find what works best for each individual company. The six important factors formed the basis for the recommendations. The study recommend that startups should utilize partnerships and process automation. Startups should also be aware of, and work with, the success factors of cloud computing, use modularity when selling to markets with different customer needs, automate other processes before automating sales, keep customer focus when developing the product, and work actively to become more scalable.