To Scale Or Not Scale?

I was at an event earlier this week with a room full of tech start-up and growth company COOs.

One word that was used often in conversation was "scaling". 

"As the business scales", "When you're scaling up", "scaling the business", "scaling the team", "bringing scale to the team"... these were all typical soundbites.

I've heard people use the term so much over the past few years.  In a start-up it's easier to talk about "growth" and "scale" than trickier subjects such as "revenue" and "profit".

So, to clear things up, just what is "scaling".

Well, in my opinion, it's something more than just "size".

It's about efficiency of resource utilisation.

Here's a simple example.  You have £100,000 in revenue.  You have 5 people.  You have 2 web servers.

What happens when you double the revenue?  Do you double the team and double the number of servers?  If you do, you are not scaling.  You are just growing. 

Scaling would mean that you doubled the revenue, but the team size and web servers did not need to double.  Maybe the team went to 6 people and the web servers stayed the same.  Now you're starting to scale.

Scaling come from the term "economies of scale". 

The more transactions that take place, the cost per transaction comes down.

So - are you scaling or growing?  Ideally both!