Unit 25 of 62
In Progress

What Is (Really) Scalability?

Scalability is one of the most important and least understood concepts that VCs use.

📌 You will note the different format of this video, as it was originally shot for our VC Pitching Track.  

How do you recognize whether a startup is scalable or not? Do you agree with our analysis?

💬 Let us know in the Comments section below.

👀 Sources and Additional Material

Responses

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  1. How far can a scalable startup go without any profit? (Or how long will investors support it?)
    Dropbox has had little/no profits so far, and even if there is high scalability, what if it never reaches the desired profitability?

    1. Yes it’s a very important question and a moving one. With the current crisis, being able to generate profits has become more important than in the past.
      The point on “what if” is also top of mind for VCs. That’s why they spend so much time understanding “unit economics”. But in some cases, it’s never sure at the beginning (think Uber and Spotify).

  2. I was just wondering, wouldn’t software companies like Dropbox also need to continuously improve their software in order to keep up with the cloud strorage competitors of today, perhaps making them less scalable now? Could it be that they were scalable in 2015 because of less competition, or is scalability a prior general characteristic of the software industry as a whole?

    1. You’re totally right, these companies keep hiring developers to upgrade the product. The salary line increases in ABSOLUTE numbers ($$$). But relative to sales, the RELATIVE % decreases.

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