The Lean Business Blog

What is scalability, and why is it important for your Startup?

Posted by Yngve Dahle on March 31, 2016

This blog post is co-written by Yngve Dahle and Mark Robinson.

One thing that above all else characterizes companies with a successful business model is that they are scalable; therefore we shall explain this concept in detail. “Vekstbedriften” (Dahle et. al. 2012) defines scalability1 as follows:

In an extremely scalable enterprise, each new unit of the product or service costs dramatically less to manufacture and market than the initially developed unit, while the sales price is generally maintained.

We have to say at this point that scalability is not a black-and-white concept. No enterprises will be 100% scalable or non-scalable. On the contrary the drivers for scalability influence the company to a greater or lesser degree. The sum of these influences will put the enterprise somewhere in between non-scalable and fully scalable.

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Topics: Business Model, Scalability

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