Scale Up Skeletons #2 – The Wrong Market

As we approach Halloween, I’ve pulled together a few short lessons from skeletons that have jumped out at me over the years to disrupt the growth journey in companies that I’ve been involved with together with reflections on what I would do differently next time around.

This one caused a lot of heartache at the time…

The story:

Taking a new technology to high-volume production is an exciting and daunting time for any business.  For process technologies, the timing of this stage of growth is determined by the customer not by the technology supplier.  If you are designed in, then you’ve got to keep up with the production ramp.  If you miss the design-freeze, then you remain on the side-lines as a demo.  At this stage of growth, the focus of a business is understandably on operational issues such as ensuring the right equipment and supplies are in the right place to support the production ramp.

I was involved in a business where we were having great success coating fashion items such as shoes, gloves, and hats with a novel coating that made them water-repellent.  Every week our customers were coming to us wanting to start processing new products.  Being a fashion industry, they also regularly introduced new materials and frequently moved production locations to take advantage of fast-changing supply chains.  Production volumes changed rapidly and with relatively poor visibility.

The impact:

As a process supplier, this meant that we were constantly working to re-optimise the process for new materials and products and frequently needing to ship people and machines from factory to factory as we tried to keep up.  Scaling up our process required an impossible-to-manage scale-up of our international support team and operations.

At the same time, other earlier-stage opportunities were being missed or insufficiently resourced.

Ultimately, we needed to make some tough decisions and ended up making a rather hasty and undignified exit from the fashion clothing market in order to focus on a more stable, easier to scale, and lucrative market: consumer electronics.


One question we should have asked ourselves more frequently was “what’s our plan if all this goes well?…”  Good operational people constantly consider back-up and contingency plans for things going wrong; in our case, we didn’t think through the success plan carefully enough.  Everything that happened was entirely predictable and we could have benefited by transferring capability and responsibility for process optimisation and new-product introductions to our customer and/or local staff.  This would have required the establishment of training and accreditation and some other modifications to protect IP, which would have left us more time to focus on new markets whilst continuing to benefit from the clothing sector.

Considering long-term support requirements is critical to the scalability and profitability of any business model.  Niche markets can be supported by experts and the added value of this needs to be “sold in” from the start.  Interactions between these experts and the customers will also drive innovation for future products.  Mass markets need to be served by highly automated systems, requiring minimal expert intervention with other mechanisms being used to gain customer input to future product improvements.

In the next instalments of this blog, I’ll consider customers and making sure that you are listening to the right ones.

Telegraph Materials offers advisory services and practical support to fast-growth businesses bringing new materials-science based technologies and processes to international B2B markets.  For more information, see, where you can also find the previous editions of this blog series.

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