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Startup Secret No. 19: Shift your own gears

You need to run the business manually for a while before you shift it into automatic.

Rafe Needleman Former Editor at Large
Rafe Needleman reviews mobile apps and products for fun, and picks startups apart when he gets bored. He has evaluated thousands of new companies, most of which have since gone out of business.
Rafe Needleman
2 min read

"Scalability is overrated."

--Tony Emerson, SEO Analyst, SpareFoot

How do you say, "Screw you" in Silicon Valley? Ask, "Does it scale?"

It's one of those obnoxious conversation killers that entrepreneurs get all the time. The appropriate answer, I think, is this: "Oh, I hadn't thought of that. Thanks so much for asking!"

Of course it scales. Or maybe it doesn't, because it's not supposed to. Or, as Tony from SpareFoot adds, maybe scaling--that is, finding a way to automate the technology, or lower the resources required, for incremental customers--just isn't important right now.

Tony says, "We found in our early days that scalability is not a means to success. Some things are going to be manual--very manual--when you start. Repeating these processes manually is how you discover efficiencies."

SpareFoot is a storage unit broker. It helps consumers find a place to stash their stuff. Smart idea, but hard to kick off. As Tony says, "In our infancy we had little interest. Customers had no use for us because we didn't have very many storage facilities on our network, and storage facilities didn't pay any attention because we didn't have any traffic."

The company tackled the problem by throwing technology at it. "We built the technological infrastructure to have thousands of storage facilities. And then, after months of frustration from lack of interest on both sides, we had that realization: Scalability needs to come later."

SpareFoot dropped back and went manual. "When we had a customer fill out a form to reserve a storage unit, we would literally Google storage facilities in that area and start calling around. We'd ask, 'Hey, we've got a customer in your area who's looking for a storage unit. What are your prices? Would you like to get listed on our site? It's free unless we move somebody in...' Eventually, we started building up a solid inventory of storage facilities who were paying for each moved-in customer."

Once the business was moving, albeit more manually than the founders wanted, the technology did become valuable. But it took the hands-on approach to get there. Tony concludes: "With the facilities on board, we began ranking better in search engines, and getting more move-ins. More move-ins meant more word of mouth sign-ups from facility owners. And more storage facilities meant even better rankings."

SpareFoot now has 6,000 facilities on its service. That's more than the team could handle without a technology infrastructure. But they don't think they would have gotten there at all if they hadn't managed their first deals completely manually.

Startup Secrets is based on personal interviews with people building companies and from their blog posts and news stories. Subscribe to Startup Secrets on Twitter or come back to Rafe's Radar every day for a new one. See all the Startup Secrets.