Many entrepreneurs must decide when to scale their business, embrace opportunity, and aim for rapid growth. As explored in a Harvard Business Review article, the one pivotal differentiator in rapid growth startups that fail and succeed is “commitment risk.”
Uber and Facebook serve as examples of startups that engineered growth at such a pace that they have blindsided their competitors and pushed themselves into lucrative markets. On the flip side, many examples of startups that failed to properly evaluate and test products, markets, and consumer appetite exist. These startups expanded before they had the infrastructure and capabilities to capitalize on opportunities and fulfill consumer expectations. The examples include largely forgotten names such as Baroo and Homejoy and even familiar ones such as Groupon.
Scaling a business requires a steadfast commitment to a specific product, concept, practice, or service, even though it still requires testing and refinement in consumer markets. The strategy carries significant risk, but disruption can garner unexpected gains and convince consumers they need something they didn’t realize they needed.
For many companies, scaling slowly and testing go-to-market pathways presents a better alternative. For example, the online pharmacy PillPack stemmed from an MIT hackathon in 2013. The founders participated in the Techstars startup accelerator and collaborated with IDEO to refine product design. A pilot store in New Hampshire validated the concept, which led to nationwide expansion in 2016 and scaling revenue to $100 million. The exit for PharmacyOS came in 2018, with a successful acquisition by Amazon.
Gregor Gregory 