What Is Growth and What It Does for Startups
You can read about hundreds of startups that lost investors' money by focusing on unessential activities, hiring the wrong or too many people, and paying for inefficient tactics.
When building a startup, everyone's job should be to find the growth levers and use them properly. There are methods, systems, and actions that are repeatable and easy to understand. The hard part is to maintain the growth mindset. It has to be present day in and day out.
You must experiment, measure, discover what's working, and iterate.
That's it. That's (almost) all there is in terms of growth on a high level. If you do it diligently, you'll find sweet spots and use them to your advantage.
And if you don't know, now you know.
I won't continue with Biggie's lyrics but with Steve Blank's omnipresent affirmation that "a startup is not a small version of a big company.". That is the bedrock of any growth initiative.
The best practices of big companies don't apply to startups. Coming up with an idea and building a successful startup on top of that need a different way. The path of growth is critical for success, especially for tech startups.
Growth Strategies for Pre-Revenue Phase
In the pre-revenue phase, the growth plan should focus on enlarging the customer base. Bring as many as fast as possible.
Get them on board by helping them take meaningful actions until they hit the "AHA moment." Then, activate them and improve the retention. Iterate until you begin to see signals of product-market fit.
Growth Strategies for Post-Revenue Phase
In the post-revenue phase, the growth plan should focus on increasing revenue, gaining market share, and achieving long-term profitability.
A strong growth leads to a competitive advantage. You can challenge your industry, hire top talent, and have an edge regarding investors. They are more likely to invest in a rapidly evolving, profitable startup with a clear plan for sustainable growth.
Stay on Your Toes
Plus, growth motors implicitly improve the product when they are in motion. As a business grows, it can gather better customer feedback and use it to refine the product or service to meet its target audience's needs.
Down the road, as cliche as it sounds, it's essential to stay agile and guard the growth mindset. Startups should be willing to adjust their strategy to adapt to changing market conditions and customer needs. But the process should remain the same:
- Collect customer insights (customer interviews, emails, DMs, conversations, and so on) and create a backlog of ideas.
- Start prioritizing and putting them into the pipeline.
- Experiment based on hypotheses, rationale, and metrics.
- Execute and measure the results. Document that information, analyze, learn, and refine.
- Now, there's only one thing left to do: again!
Conclusion
Attaining escape velocity requires a strong focus on growth from day one. Startups need to identify their levers and use them diligently, experimenting, measuring, iterating, and prioritizing customer feedback.
While it may be tempting to focus on unessential activities, hire too many people, or use inefficient tactics, it's crucial to stay agile, guard the growth mindset, and adapt to changing market conditions and customer needs. By doing so, startups can achieve sustainable growth, gain a competitive advantage, and increase revenue and market share over time.