What I’ve Learned from 10 Years as a Successful Founder (Part Three)…
Below is part three of an ongoing series of raw and honest posts, designed to share stories directly from our own personal experiences of start-up success. They are a little rough around the edges but full of real world advice. In part three we look at the framework used to help scale one of our own businesses and avoid the inevitable risks that come with fast growth.
(If you want to start at the beginning of the series you can find part one right here)
Starting a new business is exciting, exhilarating and damn near the hardest and most frightening thing you’ll ever do in equal measure.
In part one we established the type of traits required to make a success of those first few months. Before going on to explore how to begin thinking about setting yourself up for success before you hit that crazy scaling period. Setting up a solid cultural code and ensuring it is used as the framework for everything from hiring to firing and back again.
In reality the journey to this stage has been all ‘hang onto your hats’, ‘making-it-by-the-skin-of-your-teeth’ fast. You are hiring at a rate of knots based on the initial traction and finding your market fit (a post for another day!), but, and it’s a big BUT, it is not sustainable, both for everyone’s well-being and because all good things run out of steam.
And if you don’t have a plan this can be the scariest moment of all.
You see, by this point in the journey you’ll have staff. Mortgages to pay and a fixed overhead bill that can’t be covered with some consulting or a second income! You must, therefore, plan ahead and start thinking more strategically about your growth engine and approach to sales.
I was fortunate to have read a lot around this stage of growth before hitting it and the approach was guided by perhaps one of the very best pieces of writing I have ever seen around what it takes to build a significant and valuable business.
It went a little like this:
“The best kind of business is thus one where you can tell a compelling story about the future. The stories will all be different, but they take the same form; find a small target market and become the best in the world at serving it. Take over adjacent markets, widen the aperture of what you’re doing, and capture more and more.
Once the operation is quite large, some combinations of network effects, technology, scale advantages, or even brand should make it very hard for others to follow. That is the recipe for building valuable businesses.”
How to follow the model
So, what does that mean for the aforementioned sales/growth plan? In very simple terms it starts with a focus on market fit (ensuring you have a ‘small target market’). By this stage in your story there is an assumption that you will have nailed this already; it’s why you have already started hiring and are running to keep up.
Your energies should very much focus on perfecting that product or service to ensure it really is the very best in the world.
In my last business this revolved around finding ways to add data to the decision process around what content your business should invest in and produce in order to build brand and an inbound sales pipeline.
We did that, iterating the process to a point where it resonated so well that we were pitching to brands that we had no right to win. What we lacked in scale and history we made up with passion and the development of our unique data proposition.
That commitment to ‘find a small target market and become the best in the world at serving it’ served us well, allowing us to grow toa scale and level of brand awareness that meant we could begin to look at growing out more laterally into connected services.
How do you decide where to grow next?
To do that we spent a lot of time speaking to our existing customers and understanding what their pain points were. In doing so they became our map builders; helping us understand where they were being underserved or overcharged so we could decide where to focus efforts on building out a better option for them.
This is a process that works well irrespective of what business you are in as it pays to stay as close as possible to the markets that you serve and your key customers.
And it is working through this process, adding products or services in related spaces that allows us to capture the opportunity afforded through this phase of our guiding plan:
“Take over adjacent markets, widen the aperture of what you’re doing, and capture more and more.“
Scaling your way to success
In many ways it is this period that is most rewarding of all; you’ve fought through the painful initial ‘finding market fit’ stage, set your culture and are hiring well, plus you have multiple fronts from which you can seek growth.
To this point, however, you have most probably played a key role in that sales process, but now is the time to extend it beyond your own energy and to start looking at how strategy can begin to play a part outside of your own network and any inbound interest your scaling activities has attracted, the latter of which gives you a tool to utilise in its own right.
Scale advantages, dilute the pool of competitors around you and open up opportunities for bigger contracts and sale values; something a good team of ‘sales’ people can take advantage of.
The look and make-up of that sales team will look different for all businesses of course, but there are a few areas that all should consider and few, if any, look like traditional sales.
In very few industries now do cold sales work well. Instead you must look at ways to scale your inbound pipeline and to ensure you stay front of mind for when your customers – both current and future – are ready to make that buying decision. And the best way to do that is to ensure you invest in roles that cover areas such as:
Inbound and CRM Nurture
Consistently reaching out to warm contacts and relevant buyers at the right stage in the purchase cycle is a critical part of success from a sales strategy perspective and gone are the days when you had to employ an army of salespeople to manage that through their own network of contacts.
Instead you can now be smarter, utilising CRM platforms and combining it with an intelligent content strategy and workflow to design personalised interactions with a much bigger group of super-relevant people.
The process is part of a transformative sales and marketing approach which brings together two new areas known as Inbound Marketing and Marketing Automation.
It’s a subject area large enough in its own right to fill the pages of a chunky book, but in simple terms you utilise a new-era CRM (such as the brilliant one provided by HubSpot) to capture key information about your website visitors, including such things as what pages they land on and content they read to then govern the way you interact with them.
This could be via the provision or more personalised and tailored content to help make them a smarter consumer or by more informed sales nurture calls, to check up on how they are doing and where they are at currently in the buying cycle. And you can ‘automate’ lots of these processes (hence the marketing automation moniker) to allow a smaller team of people to manage it.
Irrespective of what business you’re in, the era of hard selling has ended. With greater access to information than ever before, consumers (you and I!) are more informed and better equipped to make better choices than ever before. The impact of that is that we no longer what bluster and pressure sales. Instead we want an expert to help us make the right decision.
This starts with the content you produce on your site and extends through everything from your brand values and positioning to the type of people you hire – and nowhere is it more important than in your sales team.
Often, they are the first human touch point with the brand – whether that’s on chat, phone or real life and so anything other than a desire to help is going to put your customer off, quickly.
Hire experts, nurture and support them to share their expertise in as many ways as possible and you’ll see immediate improvements in conversion.
Marketing should then be put at the front and centre of all of it, not in the way you may perceive in your head, but as a team that is focused on an obsessive understanding of your customer and client and in ways to reach them at every stage in the purchase funnel.
Adding tech efficiency
You’ll also be throwing off cash by this point or will have raised money smartly enough to have considered how you can build greater value via the creation of a level of proprietary technology that will make key process either more efficient or effective.
This could relate to a product or service or could be as simple as a way of saving time from other, internal and labour-intensive processes.
Either way it adds value from a buyers’ perspective also as it demonstrates scale advantage and defensibility.
We experimented with all kinds of internal tech – from simple time tracking and profitability-by client dashboards-to market leading data tools and back again.
The cumulative of all of this is that your work across brand, tech, scaling of teams and processes and general network effect does indeed make it very hard for other competitors to follow.
You are now in a defensible position and ready to think about expanding in other ways, such as through international expansion or acquisitions. But that’s a story for another day….
To read Part One of the series click here
To Read Part Two of the series click here.