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- Is vertical growth better than horizontal growth

User Chad Retz
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Step-by-step explanation:

Vertical growth

Vertical growth is considered to be a traditional strategy for a startup. This primarily means scaling your service/product within the existing line of business. By going deeper into the current market, you get a chance to increase the demand for your product and its adoption.

Namely, there are two ways to scale vertically:

1). By adding more features and capabilities to the existing product, and

2). By introducing new products to complement your core value proposition.

Horizontal growth

Horizontal growth typically means expanding the product or service to new markets, be it new geographies or business domains. By scaling horizontally, you might face additional challenges, unique to the markets you are targeting. This might be product localization issues or industry-specific business aspects. However, a vertical growth strategy is typically more lucrative and can result in better long-term ROI.

Some of the most common ways to scale your startup horizontally include the following:

1). Bringing your product/service to new markets – this can be done by developing the new market or penetrating the existing one and trying to outcompete the local providers.

2). Applying the existing assets in new business domains (for example, going from a product to a SaaS model). If your product turned out to be successful in one field, you can try to extract its core and adapt it to serve other industry needs.e.t.c

Which strategy is the right?

When choosing between vertical or horizontal growth strategies, there is no definite answer. Moreover, the best solution would be to try and combine both, at the right time, using the proper approach.

User Bozho
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