Overcoming critical challenges in scaling technology for startups

Scaling technology is a crucial step for startups aiming to expand and achieve long-term success. However, this process is not without its challenges. To overcome these hurdles, startups must address key aspects such as data management, security, varying regulations, and the evolving business landscape. By proactively addressing challenges and leveraging collaborative efforts, startups can navigate the complexities of scaling technology and position themselves for sustainable growth in the competitive market. Rishi Srivastava, director of sales and strategy, Exotel recently spoke to Dataquest on how startups can scale in India with the aid of technology.

DQ: What are your views on some critical challenges startups face when scaling their technology, and how can they be addressed? 

Rishi Srivastava: Key challenges in today's world revolve around data, security, varying regulations across countries, and the evolving business landscape. These challenges can be categorized as significant technological hurdles. Additionally, regulations hold a prominent role, particularly in India. Therefore, it is crucial to have a clear understanding of these regulations. Ensuring security is one of the foremost priorities for organizations as it encompasses personal privacy laws and standard practices within companies. It is imperative to clarify and adhere to the necessary nomenclatures and procedures as companies expand. Once revenue generation begins, there is heightened scrutiny from regulators who examine the operations closely to ensure compliance.

DQ: What are some of the best practices for building a scalable technology?

Rishi Srivastava: The key to success lies in embracing the best practices and being adaptable to change. When considering scalability, it is important to limit the planning horizon to three to five years, as unforeseen events may occur beyond that timeframe. Technology should be designed with the flexibility to accommodate changes within three to five years, as there are countless possibilities that we cannot anticipate today. Additionally, it is crucial to follow industry best practices and gather global data when applicable. For instance, if we are running a startup focused on flying cars in India, we should study the best practices in developed, developing, and underdeveloped nations based on their demographics, and implement relevant strategies accordingly. This global knowledge and practices will guide us in scaling our business effectively. It is essential to avoid excessive speculation about the distant future, as circumstances can change rapidly. Furthermore, while adopting global practices and standards, we must also consider the specific customer segments we serve. Scalability should be flexible enough to anticipate changes in customer preferences and demographics. Today, we might target children, but tomorrow our focus could shift to adults, and over time, our user base will grow and evolve. Hence, it is crucial to have a clear understanding of how we intend to navigate these dynamics.

DQ: What role does automation play in building a scalable startup, and how can startups leverage automation to improve their operations and processes? 

Rishi Srivastava: When considering the scalability of technology, automation is key for repetitive tasks that do not require human intervention or learning. For instance, if there is a need to create bulk copies based on a Bill of Quantities (BOQ), automation can easily handle such repetitive tasks. Another important aspect to consider is energy efficiency, as energy is a scarce resource. We should explore how automation can optimize energy consumption. For example, instead of adhering to generic electricity norms, we can automate processes and, if needed, consider migrating to data centers with the expertise required for efficient operations. By focusing on what we do best and leveraging automation, we can streamline operations. Moreover, automation can be applied to processes that do not hinder productivity, as tasks lacking significant intellectual input can be automated. This enhances efficiency and allows us to achieve desired outcomes with optimal numbers. Ultimately, maintaining a healthy profit and loss statement remains crucial in the present context.

DQ: What critical metrics should startups track to measure their success in building a scalable technology platform, and how can they use those metrics to drive continuous improvement?

Rishi Srivastava: Certain metrics are commonly discussed and practiced in business, such as profit and loss (P&L) or financial metrics. However, it is essential to look beyond immediate financial goals and focus on industry-specific best practices as long-term metrics. While P&L metrics receive significant attention, they primarily serve short-term objectives for a specific financial year rather than long-term success. For sustained growth, we must prioritize innovation in our products and adapt to changing consumer behavior. Scalability metrics, sustainability metrics, and understanding consumer behavior become crucial, as revenue streams rely on customers. Instead of solely focusing on the P&L, customer retention should be a key metric to consider. Automation and other results can contribute to retaining clients, leading to increased business opportunities. Understanding consumer behavior through retention metrics allows us to align marketing strategies and leverage tools like BCG matrices or Kohler's marketing stats for long-term success. By integrating these metrics, we can drive success at both the individual and organizational levels.

DQ: How can startups ensure their technology platform is secure and compliant with relevant regulations as they scale their business?

Rishi Srivastava: When considering the context of startups within Indian geographical boundaries, it is crucial to work collaboratively with regulators from the very beginning. Relying solely on regulators to determine the future of the startup is not the ideal approach. Instead, startups should proactively engage with regulators and begin working on regulatory compliance from day one. This approach allows startups to understand the industry landscape, anticipate forthcoming regulations, and align their operations accordingly. When startups and regulators work in tandem, the regulators also strive to establish best practices and provide support to the industry. In the realm of lawmaking, the focus tends to be on assisting the weakest sections of society, and as innovators, startups can position themselves to receive the greatest support by collaborating effectively.

Another important aspect of collaboration is adopting the best industry practices from global standards. Regulations in other parts of the world are often more stringent, and these practices will eventually find their place in India as well. Regulators themselves may refer to these global standards. By ensuring alignment between startups, regulators, and global best practices, a win-win situation is created for all stakeholders.

For instance, if a startup operates in India and plans to expand to Europe, where privacy laws are significantly more stringent, taking proactive steps to comply with GDPR (General Data Protection Regulation) before commencing operations can save time and resources. This approach becomes particularly relevant when working with multinational companies (MNCs) in the Indian B2B market, whose geographical headquarters are located in Europe. It is essential to consider such factors, as MNCs may require GDPR compliance even for operations in India.