How to Scale Your Start-up: Insights from a “Master Chef”

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Heavy Chef is an organisation which aims to empower budding entrepreneurs to start new ventures and help them to succeed. Various ‘Heavy Chefs’ – those who walk the talk, who practise what they preach and who eat their own food, ie the heavy chefs – from around the world share their knowledge with their community of around 20,000+ entrepreneurs, intrapreneurs and graduates via events, tours and workshops.

At Xero, we love Heavy Chef and what they stand for. We’ve worked with them many times before.

Earlier this month, we attended an exclusive four-hour Heavy Chef Master Class on ‘How to Scale Your Start-up’ led by Silicon Valley ‘Master of Scale’ Gabriel Luna-Ostaseski. From very humble beginnings Gabriel is now a four times founder.

Because he built so many successful start-ups and has helped many other businesses to grow, Gabriel can see patterns in the steps that businesses need to take in order to scale. From this learned wisdom he created various models and frameworks which he shared with us.

Four steps to scaling your business

Every business wants to scale. But most people do not realise that they have to solve their product and marketing problems before they scale.

With that in mind, Gabriel believes that there are four steps to scaling:

1. Incubation phase

The incubation stage should be all about getting to know your customer. You should be building hypotheses about your customers and getting out of your office to find whether your suppositions are correct. You are looking for patterns in their behaviour that you can capitalise on.

2. Validation phase

The validation phase comes once you have shaped some ideas about your customer and your business model. You probably have your first set of customers by this stage. Some people confuse validation for being ready to scale but you are in fact optimizing your business by learning more about your customers – validating what you learnt during the incubation phase.

3. Upshift phase

The upshift phase is about repeatability and predictability. You may have ten customers, but can you get to fifty? Can you repeat the success that you just had or does the model fall apart with five times as many customers?

At this stage, businesses need to be extremely agile. You are getting to know the target customer well, but you must generate measurables and define your business’s unit economics. If you are spending a rand to get a new customer and making one rand back as a result, it’s not the right time to scale.

4. Scale

The time has come to scale. Here you are simply adding more resources to a successful model. Remember it is possible for businesses to go back and forth through the above mentioned phases. ie if you add a number of people to your team at the scale phase, you can go back to the validation phase. When a company grows, you often take a step back before you can go forward.

Testing your business model

Next, Gabriel walked us through an eight-step process to test and understand the components of a business model. He also gave hints as to how to build a compelling narrative which will help you sell your product.

Define your ideal customer profile
Identify your target customer’s top three problems which your service/product can solve.
Quantify the cost of your customer not purchasing your service/product
Define the status quo
Contrast the customer’s situation before purchasing your product/service with the customer’s situation after purchasing your product/service
Define the benefit in 25 words or less
Provide facts and figures to prove that your solution has helped other people.
Gather anecdotal stories from the people that you have helped and use this in your sales pitch..

What makes this process so useful is that it’s repeatable and predictable. It tests your assumptions and helps you understand exactly how your business is truly benefiting your customer.

After the Master Class, we split into groups and worked on the eight steps together in relation to our own businesses. This process was both eye-opening and challenging. It required critical thinking and digging below the surface.

It was a great opportunity to be in a room filled with like-minded individuals all wanting to have an impact on the world in some way. Gabriel’s teachings were well-received, and we’re sure that some great new businesses will be popping up as a result of it.

Live in South Africa? The next Heavy Chef Master Class with Mike Perk, one of the leading change consultants working in Africa and Europe, will take place on Jan 30, 2019 in Johannesburg and on Feb 6 2019 in Cape Town. Make sure to book now. You won’t regret it.

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