A scaleup is a company who has an average annualized return of at least 20% in the past 3 years with at least 10 employees in the beginning of the period A scaleup can be identified as being in the "growth phase" life-cycle in the Millers and Friesen life cycle theorem, or the "Direction phase" in the Greiner growth curve. The importance of scaleups and the rise of their terminology can be found in the study of the World Economic Forum which found that not all startups make it big, but the ones that do greatly impact society by means of new technology, services and increased employment. To aid this rise, instead of large startup incubators, policy makers are more and more focusing on scaleups since they are the ones that add value.
Definition
Other definition than the official one from the OECD may apply to better fit scaleup in specific niches. Mostly scaleups are seen as high-tech startups, but scaleups can be much less visible in the economy for instance small local businesses growing and expanding from 10 employees to 17 in three years are already classified as scaleups. These businesses are important to consider when looking at scaleups since these are the companies that add value to the economy by increased job offers. Endeavor defines scaleups as companies growing at 20% over the past three years. Lorenzo Franchini, founder of ScaleIT, identified some key metrics in order to give a more precise definition of a scaleup: 1 million euros in turnover in the past 12 months or 1 million users per month ; at least 20% of turnover from foreign clients; at least +10% growth month on month and +100% year on year. One commonly used definition of 'scaleup' is the OECD-Eurostat definition relating to 'gazelles' or High Growth Firms: "All enterprises with average annualised growth greater than 20% per annum, over a three year period should be considered as high-growth enterprises. Growth can be measured by the number of employees or by turnover."
Evolution of a scaleup
One way of looking at the evolution of a startup into a scaleup is that scaleups evolve from startups as they cross the "growth chasm" that is, once they solve the startup challenges of market research, development, and identifying a repeatable, scalable business model. This can be identified by a significant sustained repetition of critical mass in a particular startup's most significant metric – generally, this metric is revenue, number of employers, number of active users, number of active customers, or effective reach, relative to funds raised. A key difference between a startup and a scaleup is the main challenges faced. While a startup's main challenge is to find a repeatable scalable business model, a scaleup's main challenge is growth of the already identified business model while maintaining operational controls.
Economic importance of Scaleups
published a study reporting that scaleups create most of Southeast Asia's new jobs. Endeavor founder/CEO Linda Rottenberg published the scaleup petition to further elevate the movement around scaleups. .
Mentions of Scaleup as a concept
SEP is a pan-European startup ecosystem established by the European Commission in January 2014 under the EU Startup Europe initiative during the WorldEconomic Forum – Mind The Bridge Foundation leads SEP. Its founding partners include BBVA, Telefónica, Orange, Cambridge, IE Business School, European Investment Bank Group, and the European Investment Fund, with support from UK innovation foundation Nesta. SEP is testing accelerated scaleup methodologies, a term it coined while defining Marco Marinucci: founder & CEO – Mind The Bridge Foundation that leads Startup Europe Partnership. Sherry Coutu: Scaleup Advocate, Angel investor, Commander of the Order of the British Empire for entrepreneurship. "We really need to shift the focus from startups to scaleups". . In March 2014 Sherry was commissioned by BIS through the Information Economy Council to produce '', an independent report that presents results from other nations that have changed their economic policy towards scaleups and recommends actions the UK needs to take to ensure is the leading economy in the world for generations to come. Alberto Onetti: Chairman – Mind The Bridge Foundation that leads Startup Europe Partnership ; SEP Coordinator at MTB. Professor of Entrepreneurship at Insubria University and serial entrepreneur. He is a scaleup advocate. Brad Feld: A noted American entrepreneur, author, blogger, and venture capitalist. In 2013 he wrote a piece about shifting his focus from startups to scaleups. The World Economic Forum published a report highlighting scaleups as the collaborative road to sustainable growth. SEP was launched at the 2014 WEF event in Davos, Switzerland. David Butler, vice president of innovation at The Coca-Cola Company, gave a speech in August 2013 about the next wave of innovation; Scaleups. He described why and how Coca-Cola is joining the entrepreneurial revolution. "The weird thing is that big, established companies know how to scale, but don’t know how to start. At Coke, we think the big idea, or the next wave of innovation; will be all about building scaleups." Daniel Isenberg, professor of Management Practice at Babson Global who publishes articles in the Harvard Business Review, leads the Scale Up Milwaukee startup ecosystem. He reports that "Startup CEO, Startup Boards, and Startup Metrics each are a lot more about ‘scaling up’ than ‘starting up’." Joe Haslam, Associate Professor at IE Business School and executive director of Owners & Entrepreneurs Management Program gave a class titled "Scaleup is the New Startup" in March 2014. Joe explains how understanding operations is the key to scaling in this video Verne Harnish is founder of ScaleUpU with Brad Feld and Sheri Coutu as advisors; author of Scaling Up ; and founder of the Entrepreneurs' Organization.
History
The origin or first use of the term scaleup in the context of a growing company is unknown
