Make more informative scale up decisions

Erkki Siira

How could we evaluate new product concepts to get a better insight if the concepts could be scaled up? To give tools for the evaluation a set of properties affecting scaling up have been identified to help in go/no-go decisions. Quantification of scale up properties give possibilities to compare different concepts to each other.

The definition of scale-up is not set in stone. As a general word it means that something is increased in volume. When giving it a context of creation of new product, it is framed as product is aimed for larger markets, to new customers and having a process where product/service is in process of expanding. Scaling up a concept means different things than scaling up a company, but both are interlinked together. Not surprisingly, as requirement for a concept to thrive needs the organizational excellence as well. For example, Payne et al. [1] have discussed how start-ups could be turned into scale-up companies through their value proposition capabilities.

Organizations with a possible scale up concept need to evaluate the situation and decide in which way should they go and if they should go forward at all. The challenge with go/no-go decisions with possible scale-up solutions is lack of insight around the properties that are existing. People may do decisions by educated guesses or just by analyzing few different things. Portfolio management gives tools for comparison of competing concepts and when there often aren’t enough resources for everything some of the concepts might get discarded to give more focus on better ones. Scale-up analysis contributes to this line of research.

Commercialization is the last phase of innovation process [2] and it is one of the main perspectives the scale-up of a concept is about. Turning the concept to a product, resourcing it with capable employees and finding customers and even shaping new markets for it is part both scale-up and ends up with the commercialization. Paasi et al. [2] suggest that commercialization should be taken more into account already when designing a product as often the focus is in the making the product to work and prioritizing the features – not in the needs of commercialization. When companies are creating new business – or innovations – they are also stepping towards an unknown future, which includes several uncertainties. The analysis of scale-up potential is a helpful mostly on the commercialization phase, but as Paasi et al. state the helpful thing would be to use commercialization-related data to earlier phases as well and scale-up analysis is one tool to utilize there.

The scale-up properties

The identification of scale-up properties provides the backbone for the quantification. Quantification is important in order to put different solutions in to same context and frame. The identified properties originate from the literature and experiences from SEED and Reboot IoT Factory -projects. Sources include industrial companies, venture capitalists and workshops with research institutes. These are the foundation for the property identification. The cases behind have a digital element in them and that may be limiting the use somewhat in technology dimension – by not being extensive enough in other cases.

Figure 1. The identified scale-up properties grouped into three main dimensions.

There are 19 identified scale-up properties, which have been divided into three dimensions: business, technology, and human resources. The property clustering into dimensions was done to guide in the usage of the tool and get the right mindset when using the tool as the properties might be in some cases overlapping and the point of view tells how the multifaceted case should be viewed. The clustering was done retrospectively after identification of properties. Each property carries guidelines along and the tool offers the explanation for each choice what they mean. As the cases are complex the guidelines and explanations do not cover everything, the user needs to also use their own judgment.

The business dimension is focusing mostly on commercialization of the concept and what properties there are that are affecting its ability to be brought to new customers and markets. Applicability of business properties to all scale-up cases may often be just a subset of all identified properties reflecting to which kind of target and scale- up is planned.

The technology dimension is about the implementation of the concept itself. This set of properties is mostly derived from cases where there is a digital component somewhere limiting the use probably a bit. The technology properties cover how the concept can be duplicated and tailored for each customer and especially how work intensive that would be. More manual work means that the scale up requires lots of resources.

The third dimension is human resources which covers the organizational aspect of scale-up. Are there enough people with right skills doing the scale-up? The people aspect is often focused the latest and challenges are tackled when going forward. Finding the right people is the key to handle the properties in the business and technology dimension.

The scale-up evaluation tool

To get most of the scale-up property analysis there is an Excel-based tool (Figure 2) which allows an easy and quick way to evaluate the property and get the results in understandable way. The tool has been introduced to companies and research community in different sessions and from the feedback it has been improved to be easier to understand and use. The tool has been made in co-operation with Joint Offering Evaluation Framework -work where are additional tools to scale-up analysis as well.

The tool has scale of four (++/+/-/–) for each of scale-up property. In addition to four-point scale there is ability to select a property to be as a showstopper or not applicable. The showstopper selection means that the property is so severe that it will alone dictate that the concept is not viable to be scaled up. For example, if legislation will stop the scale up in target market it will be a showstopper to whole scale-up or for example if there are no available experts to implement the scale up. Plusses and minuses are counted to get the total points for the concept which makes it comparable to other concepts analyzed with the tool. The main contribution of the use of the tool is that makes properties visible for people and allows to be able to achieve the upscaling objectives.

There is a forked version of the scale-up tool for the joint offering toolset where the premise is that group of companies are working together towards joint product or service. From the scale-up perspective it is a subset of properties that are present in jointly working. Of course, all can use the full analysis for themselves to map their capabilities and challenges during scale up.

Figure 2. The scale-up tool in use.

A poster of the scale up and properties in dimensions can be found here.

In addition to new product scale up it is an acknowledged challenge in ecosystemic projects where several parties are together doing research and innovation. To get more impact from the project the target is to get economically sound, scalable and lasting results. The step from a research proof-of-concept to product and commercialization often require time and resources which might not be present during research project. The use of the scale up analysis tool could be helpful in research projects as the properties in scaling up of concepts are present in there as well.

Contact:
Erkki Siira
erkki.siira@vtt.fi
+358 40 846 5303

[1] Payne, A., Frow, P., & Tanev, S. (2021). Interview: Discussing Value Proposition Research in the Context of New Companies Committed to Scaling Early and Rapidly. Technology Innovation Management Review, 11(4).

[2] Paasi, J.; Valkokari, P.; Maijala, P.; Luoma, T.; Toivonen, S.: Uncertainty management in the front end of innovation development. Innorisk: The fountain of new business creation Final Report (2009)