How to scale “customization business model”

For many years startup culture had told us: “build a replicable business because if you customize the product or service for the customer you will not be able to scale”.

This is simply not true if you are building a business that requires a customized product or service for the clients, you just need to optimize for it. Let’s think about a very common business, an ice cream shop:

• Every client have a different favorite taste
• No every time you want the same flavor
• You cannot create “profiles” since customers needs are dynamic

So, it sounds like the perfect nightmare to scale right?

Well… not really… so what is the secret formula behind it?

The secret behind it is, be in control of the customization.

Think of customization as an incremental process in which you will take the customer 60–80% of the way. To understand this I want to introduce what I call the “DEVELOPMENT LS Law”.

What is the DEVELOPMENT LS LAW?

This law proposes that for every increment to learn, teach, grow or advance in a new area, the result is gonna split to half for every step you move forward:

This is because as the process becomes more sophisticated, it gets more complicated to create a big impact on it.

So, coming back to building and scaling a business that requires customization, you need to design it as an Ice Cream shop, using math to take the bigger chunk of the market while remaining finite:

STEP ONE

• Which is the biggest consideration of the client, while customizing? FLAVOR
• So, in order to avoid losing control, find the Pareto principle of your first customization: find 20% of the flavors that account for 80% of the preferences.

STEP TWO

• Figure out how you can optimize the customization with a “two-option” Step 2, so the customer will sense that the product is working “their way”. This could be pricing, delivery, size, etc.

STEP 3

• Find a cheap final touch that creates a personalized version of the product, think of toppings, color, theme, layout, etc.

This way you will create a customized experience for every customer, not to 80, 90 or 100%, but you don’t need that. This is why Baskin Robbins usually have just 21 flavors, plus seasonal and regional.

So next time you are thinking about a business model, don’t be afraid of customization, just be in control of it.