Key Features of a Successful Tech Product Episode 4
Logan Merrick

Episode 4: What Does Scalability Actually Mean For Tech Startups?

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Scalability

‘Scalability’ is one of those buzz-words that have caught on fire in the mobile application development tech community.

But it’s a very high level term and most people don’t dig down into what it actually means.

If you de-construct scalability in the context of software products you’ll find that the term is broken down into these 5 critical factors:

Architecture

Is the application able to scale using its current code base and server setup?

If not, how much load can it take and when will it need to be replaced?

Monetisation

Will your app monetisation strategy allow you to achieve a sustainable ROI per user?

This may seem like a simple question but is often overlooked. What happens if you have to pay $5.00 for every critical user?

That means your average critical user needs to generate more than $5.00.

Does your current monetisation strategy support that?

Lifecycle

Is the product lifecycle long enough to allow for massive scalability?

Can you try to estimate your product lifecycle? Allow for at least 5 years – that’s enough time to get in, make the most of it and reinvent yourself in this ever changing market.

Costs

Are the costs of running your business going to scale at the same rate as your revenue? Look at staffing, hosting, advertising, etc.

Eventually you should get to a point where the growth of these costs begin to slow down and you start to enjoy the economies of scale.

Market

Going back to point 1, is your market big enough to build a scalable business? Do some research. Get an understanding of what your market looks like.

In this episode, I talk about why you need to consider these 5 factors during the evaluation stage and the design process to make sure that you build a business that is truly scalable.

Please click on the video and subscribe to my channel!

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Logan Merrick

Logan Merrick is the co-founder and Director of Buzinga, as well as one of Australia's most recognised entrepreneurs, keynote speakers, investors and mentors. His writing on startups, technology and mobile marketing has been featured in The Australian, Business Insider, Startup Smart, Smart Company, and more.