There’s no standard definition for scaling. However, some people have given their opinions on what they think is close enough to define what scaling is. One of these is Fred Distin, a former partner at Accel Partners London.
In his answer to the question, on Quora, “What is involved in a startup “scaling”?” he defines scaling as the period in a startup’s life when management and board feels like they can systematically accelerate growth with confidence that the resources they put in will yield great and measurable results.
However, with the exception of the likes of Jumia, anyone who follows the startup scene will note that very few bred in Africa have been able to scale beyond the borders of their country.
Yet with the increase of funding to startups in Africa, we suspect that whoever is investing in these startups will eventually target the continent as a whole – not just a country where the startup has been founded.
In a bid to equip startups that might look at going this way, we spoke to Kenneth Ntende. He’s a co-founder at DusuPay which is currently operating in 8 countries including Uganda, Kenya, Nigeria, Cameroon, Ghana, Rwanda, Tanzania and the UK.
We have learnt quite a lot along the way during our expansion life cycle – Kenneth Ntende, Co-founder DusuPay
Here are some of the cautions Kenneth has for any startup that’s looking to expand beyond its country or region.
1. Do a proper analysis of the market you want to expand to.
Africa is a continent with more differences than similarities. Different markets have different languages, ethics, religions and so much more. An advert that may work perfectly in one region or country can turn out to be a disaster in another.
Kenneth recommends that you take time to really understand these varying distinctions. In the end, it gives you an added edge when approaching clients and potential partners.
2. Understanding the payments landscape is key.
You need to know how you will get the money from your clients in the country you want to expand to. In Africa for example cards account for only 1% market share of all payments so it is relevant you get a partner that enables you tap into the multiple local alternative modes of payment like Mpesa in Kenya, online banking etc.
Kenneth goes on to emphasize that this is one of the reasons they came up with DusuPay – to ensure one can access all payment modes in one place.
3. Get local partners
It is very hard to penetrate a foreign market. However, Kenneth suggests something that will enable you to get around any hurdles that may be presented by this. He recommends that you get in touch with a local trusted partners wherever you expand to give you an added advantage.
Take an example of a startup that is into e-commerce expanding to another country. You may need to get a new logistics partner for each country you expand to. This is because chances are your partner in one country doesn’t operate in another, hence the need for local partners.
4. Listen to the numbers
Scaling – once rightly done – can turn a startup into a market dominant. Yet, if wrongly executed can result into its death. Analysis of data in the new markets is key.
Kenneth recommends the use of tools like mixpanel to help get a better understanding of how you are fairing. As long as you’re willing to be brutally honest with data, it will help you know whether you should proceed with the scaling or not.
When your startup thinks of scaling, you should consider talking to those that have been able to successfully do it. This will help you avoid making mistakes that have already been made by others.