Prateek Dayal

Breaking the silence one random blog post at a time

On Businesses and Scale

One of the great things about traveling is getting to see new perspectives and meeting different people. One of the thing I found very interesting in this trip is the dynamics of local businesses. Every small town I passed by when riding riding from Ho Chi Minh City to Mui Ne has atleast a few small shops. Small restaurants (more like a lady selling noodle soup), motor bike repair shops and little shops for buying basic household stuff (and coke ofcourse). Many of these shops offer multiple services. Small grocery shops might be selling gasoline (lack of a full blown petrol bunk turned to a business opportunity) or selling mobile top-ups or may be even vietnamese coffee. Some shops would also offer ‘pay to park’ services to motor bike riders. In the tourist town of Mui Ne, where I am writing this blog post from, most shops offer multiple services to make their monthly income. The markup on selling gasoline will probably add two dollars a day to their income. People are glad if they can make the same money month after month and figure out a way to meet all their expeneses. These shops feed families and put kids through school. The families eat simple meals (the shop is mostly an extension of their house so you can always get a sneak peek into their lives) and overall seem pretty content.

This is in stark contrast to the online world. Small Businesses with five or ten people making tens of thousands of dollars a month, working on stuff they enjoy with an unparalleled sense of freedom and control have to keep a sorry face for running a ‘lifestyle business’. Most of the founders I know (myself included) grew up in a middle class environment with access to good education but not much more disposable cash to pursue our ideas. Today it’s in anyone’s reach to start a company and scale it to the point where you have a team and enough cashflows from customers to start shooting higher – making bigger bets. By the very nature of the internet, every company that starts in internet has access to an open market, best tools and people. Instead of encouraging more people to start companies and change their lives and lives of a few more people around them, we worry only about ‘scale’ and raising money to somehow get to that ‘scale’ and not ‘fail’. Scale is a given on the internet if you have a great product. We are incredibly fortunate to be an industry like that. If you are worrying about scale, you are worrying about the wrong problem. If you have a truly outstanding product (and you can get there over time), you will achieve scale. May be a few years here or there. Who gives a shit?

Startups are very high pressure. If you can bootstrap a business and hit profitability, pat your self on the back. And pat anyone else who gets there as well – You are already past the hardest part. I wish more founders and their teams enjoyed the freedom that startups can buy them. The freedom to work on stuff that they care about, the freedom from corporate bullshit and the freedom to take time off to do what they enjoy in life.