Growth Considerations for Startups
Written by Payman Taei
20 May 2017
Startup growth means more than just "my company is getting bigger and making more money all the time." It means that your company is maturing at a way that both supports the state it exists in today and makes it possible to take the next step into the company you hope to be running tomorrow.
Always remember that "growth" and "profitable growth" are two different things. Correct growth in terms of startup success means that you're making business decisions with your head as opposed to your heart. You're focused on acquiring new customers, yes - but retaining existing ones is just as important to you.
You're not trying to burn through cash every month - you're trying to stretch the value of each dollar as far as it will go at the exact same time.
How Startup Growth is Supposed to Work
Ideally, startup growth is organic - at least until your product or service is a perfect fit for the market you're trying to serve. Organic growth means that you're not just acquiring users, but ENGAGED users - the ones who are actually interested in what you have to offer.
This means that as your audience is getting bigger, you're also attracting the right type of attention from investors, which in turn fuels you with more resources to strengthen your efforts into getting bigger and better and more successful.
When executed properly, this type of appropriate, organic growth is a self-fulfilling prophecy. It's a cycle that feeds itself and makes itself more powerful. When it ISN'T executed properly, well…
How Growth Contributes to Startup Failure
If you take a look at the list of some of the most common reasons why startups fail, almost all of them can be traced back to the larger idea of growth - or lack thereof. One study estimates that a general lack of experience in selling goods and services is the reason why 11% of startups fail on average.
If you're not experienced in the type of product you're trying to create and are making poor decisions based on inaccurate information, it's easy to see how this would hinder your ability to A) bring that product or service to market, and B) bring in enough revenue to grow at the rate you need to sustain your goals.
Two of the other major reasons why startups fail have to do with an unbalanced experience or lack of managerial experience and a general sense of incompetence, coming in at 30% and 46% on average, respectively. Again: both of these inhibit your startup's ability to grow in their own unique ways.
The lack of experience in being the captain of this particular ship likely means you won't have the skills necessary to grow fast enough, while general incompetence means you might not even know that you're supposed to be focused on growth in the first place.
Just when you thought "not growing fast enough" quickly rose to the top of your list of things to worry about at night, you realize that the reverse is also true: "growing too fast, too soon" is another common reason why most startups fail.
Growing too soon comes along with a number of traps that you might fall into, like releasing a product or service before it's ready or before you've done your due diligence and made sure that the market is ready for what you have to offer. All of these things are the types of mistakes you really only get to make once.
Growth and Marketing: What You Need to Know
We've spoken at length in the past about how the best marketing is purpose-driven. You're not just marketing your startup or your product or service because you're supposed to - you're doing so because you have a particular goal you need to accomplish and marketing is the best way to do it.
As your startup ages, the goals you have at various stages of the game will naturally change. In those early days, you're very concerned about getting funding, but as your product moves closer to completion, it's all about priming your audience.
The same thing MUST be true for your marketing efforts. Remember that marketing isn't JUST something you worry about as you're in the weeks leading up to release. From the moment you open your doors for the first time, you're essentially wearing your "Marketer" hat, whether you realize it or not.
Matching Your Marketing to Your Lifecycle Stage
In those precious early days, the larger goal of your startup is usually to find investors.
To that end, your marketing collateral becomes some variation of your startup Pitch Deck.
For example, one of the advantages of me running Visme, a fairly easy-to-use and versatile presentation tool, is that I get to see a lot of Pitch Decks created by various companies and visualize to their audience "here is who we are, here is what we want to do, here is why we want to do it and here's why we're going to succeed" in the most compelling way possible.
As you shift away from investors towards actual users, marketing should still become a constant part of your life to help build anticipation, raise awareness and support the growth you need at all times.
Use the marketing tools you have at your disposal to visually communicate the journey your startup is engaged in. Those can be infographics, videos, series of articles, or anything else you think will capture your audience’s attention.
Your product may still be a ways off, but if you capture the hearts AND minds of your audience through these and other techniques like informational content marketing, you'll be well on your way to sustaining the organic growth you need when you need it the most.
The same principles of marketing will serve you well at all stages, like the fact that visual communication is essential in terms of creating memorable content and how the principles of storytelling can help you make that critical emotional connection with your audience.
But the actual goal that you're trying to accomplish with your marketing will vary and your marketing needs to pivot in exactly the same ways.
An Eye Towards the Future
At the end of the day, it's important to remember that while growth is important to all startups, there is truly no "one-size-fits-all" approach at play.
Every company is different - even if you took a look at your closest competitor, you'd probably be looking at an entirely different organization despite the fact that you're releasing similar products and services to similar audiences.
The thing that makes your startup unique is you, which can be both a blessing and a curse in equal measure. Only by focusing on YOUR goals, YOUR product and YOUR users, will the perfect path to organic, sustainable growth reveal itself.