Stages of the Startup Journey - #9: Scale and Grow
Stage 9: Scaling and growing your business
If you’ve done the previous steps, you’re in a very elite class of startups! At this point, you’re likely less of a startup and more a full-fledged operating business. It’s likely you’re hitting profitability at some point. (At least, that’s my hope. I like unicorns that are valued based on revenue!) Now it’s time to scale your company and grow it.
Offering new products and services
What’s funny is that the growth phases of a company hold different challenges, but the cycle is very similar. In order to effectively grow and scale, you need to be iterating on your internal and customer-facing processes, procedures, policies and tools. Anytime you launch a new offering or service into the market, you need to make sure you’re following all the same steps that you took to get here in the first place. As a reminder:
Stage 1: The Idea - Remember to go back and ask yourself how your new product or service solves a real problem in the market for real people. You might be tempted to think, “Hey, I did this successfully, I’m a pro!”, but remember how you got to this point and honor your roots.
Stage 2: Research and Validation - Doing customer validation and market research is critical in ensuring you don’t spend precious time, money, or other resources on a product or service that will never increase your revenue or customer base. Doing this step every time you start something new will ensure you are always heading towards the things that are most likely to bring you success.
Stage 3: Go-No-Go Decision Time - Taking time to look over the results of your research, understand the data, and listen to your gut is key to continuing the success you’ve already found. Here is where you want to get clear on the numbers, too; things like how much will this cost me, what are those costs, and how quickly will I see a return.
Stage 4: Plan for Execution - Remember to make a plan that helps you steer exactly in the direction you want to go. Better to spend some time adjusting in execution of a plan you understand rather than shooting from the hip every minute of every day!
Stage 5: Investment Funding and Financing - You may be at a point where this step is optional. If you’ve got enough recurring or dependable revenue to be able to cash flow new products and services, then you are in the catbird seat! If you do need a little help, your options are more varied now that you have a proven, viable business model, so do your research and get your options clear in front of you before making a decision. Talk to your bank, and shop other banks too. And if you have gotten investment from angel or VC sources previously, talk to those people again as well. They might be thrilled to throw a little more at a good thing!
Stage 6: Getting to Market - All of the things you considered and designed for in the first offering are still important here. How you price the new product or service, the user experience, social media and marketing strategies, advertising spend, and how you launch this new thing are all critical to helping you ensure success.
Stage 7: Keeping Customers Happy - This is the step that is most critical to keep iterating on. Talking to your customers, looking at your support inquiries, and making sure that you are serving your existing customers’ needs keeps attrition low and makes it that much easier for existing customers to say yes to spending more money on new things with you. It’s so much easier to keep a good customer than to find new ones, so listen when they talk! And remember: this is the first place you should look to know what products and services to build next. Your customer is talking to you, telling you what they want or need; all you have to do is pay attention.
Growing your customer base
As we said in Stage 7: Keeping Customers Happy, the best way to grow your customer base is to iterate on your processes and procedures and make sure that you’re keeping existing customers happy. There’s no better advertisement than a happy customer talking about you to their friends, family, and colleagues. Focusing on this step alone will help you refine and grow your business, even if you never offer anything new. And you’ll quickly develop a reputation for being responsive, easy to work with, and interested in your customers’ needs. That is word that will definitely get around.
Scalerators and accelerators
It’s possible you’ve worked with a “scalerator” or accelerator to get to this point where you’re ready to grow. If you have, now is a great time to go back and ask for new mentors and advisors who are experts in scaling a company. There are lots of people that have levels of growth experience, such as specializing in taking companies from $1M annual revenue to $10M annual revenue. Find the right coaches, mentors, and/or partners for the stage you’re at and where you want to go. Many times these types of experts will help you in exchange for a percentage of whatever growth they help you achieve, but explore all of your options to figure out what works best for you.