In this chapter Jarvis discusses the Need/Want model. This model recognizes growth based on realized profit, which is actual profit that has already been generated. The typical model adopted by most startups or venture capitalist-backed companies is based on potential profit, which is profit expected to be accumulated in the future (it has not yet been earned) (p. 126). As the majority of this chapter is centered around how Need/Want is able to scale its company and increase revenues without necessarily increasing the number of employees, I decided to look into their offerings. Here is the link to their website! The company encompasses a portfolio of various small startup businesses that it owns as a collective. These small businesses fall within a range of different industries. Their website displays the six companies they own, and they include physical product offerings, as well as more technology-based service offerings. They likewise invest in some other companies, whether they be their friends’ companies or investment funds. There are currently six companies listed on their website that Need/Want is invested in.
Need/Want is able to scale their revenue by minimizing their expenses. They operate in ways so that they do not need more staff in order to reach more people. For example, they have a heavy reliance on social media and newsletters to remain in contact with their customers. These are scalable systems, as they have the ability to reach vast amounts of people at a low cost. They aim to increase effect messaging and positioning. On way they do so is by using A/B testing in their advertisement campaigns, which let the company test variations. They then see which variant performs the best, and from there, send the highest-performing variant to the remainder of the list (p. 126).
Jarvis concludes this chapter with the following thought-provoking messages. The following has been retrieved directly from his book.
BEGIN TO THINK ABOUT
- Where you could use automation and technology to scale so your business doesn’t have to
- How you could outsource tasks that require massive scale
- How you could address personalization and segmentation to your one-to-many communication channels (p. 134).
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One response to “Scalable Systems”
Maddie,
Interesting post! I was intrigued and enjoyed looking through the different companies in the Need/Want portfolio. I’m very curious how businesses evolve going forward, and what automation and AI can offer to small business owners. I think this will be really interesting with AI and social media marketing. The algorithms know what content user markets engage with; it would appear leveraging that data allows small businesses to be more effective with their target market without huge marketing costs.
Thanks!
Taelor