A recent study published in the Strategic Management Journal cautions startups against prioritizing early scaling, as it’s positively associated with a higher rate of firm failure—especially for platform companies. Although managers could see the potential benefits of scaling as a way to prevent competitor imitation, scaling early can also prematurely curtail learning through experimentation and committing to a business idea that lacks product-market fit.
Despite the desire to reduce the risk of imitation, research suggests startups should scale slowly and steadily
