Wednesday, August 19, 2015

4 Definitive Ways to Grow Your Startup

1. Understand the difference between traction and growth.

Before their companies start to grow, most entrepreneurs mistake traction for growth. Both come at different stages in the lifecycle of the startup and play very different roles.
Knowing where you are in your journey will help you manage your time and resources efficiently.
Balfour writes on the difference between the two. He mentions that the goal of a startup in the traction phase should be to get product/market fit, get users coming in through the door, and only then, focus on retention. He says, “If your product does not retain users, there is no point in growing the top of the funnel.”
Growth is about focusing on those levers that are pulling in the crowds, then cranking things up. He writes, “A few things happen in the growth stage. One, your growth process should be humming like a machine. Two, you should have more capital and team resources available. Three, you may start to saturate your core channel. At this point, it is time to diversify your channels.”

2. Look for common threads.

At the stage where you’re pulling in the crowds for your product, you need to focus on what’s working and what’s not. This will enable you to identify the particular growth channel or channels to allocate your energies on.
A good strategy is to look for threads or themes that are common to both your top customers and the top industries they represent. That’s where your cue to gain depth lies. For instance, if your top customers (as a factor of engagement) are those with 10 to 15 employees or are from a particular industry segment, go deeper within that segment, rather than going wide at this stage.
Startup or Giveup?

3. Identify what slows you down.

While scaling up, there may be many tasks on a daily or weekly basis that hold you back or slow you down. While scaling up, you want to channel all your focus on just one thing -- growth.
So, delegate to an internal team member tasks that don't contribute directly toward your goals. If necessary, outsource when you don’t want to build bulk internally at the growth stage.
The idea is to identify and rid yourself of all things that slow you down on your path. A good example is to visualize Steve Jobs taking back control of Apple and cutting down on those products that were slowing the company, before focusing on just those that could be leveraged for growth.

4. Don’t shy away from partnerships.

A strategic partnership can be a powerful weapon to fast-track distribution. When Tamara Steffens was in charge of business development at Path, she did a deal with Wordpress which resulted in more people posting content to Path from Wordpress than from other sources.
Balfour says of successful partnerships that, “When you sell to other companies, integrate your product into their product (in some way), in order to reach consumers who are generating the revenue (via ads or some form of payment). Most of these relationships involve a revenue share between the two companies.
Examples of such partnerships include Uber with NFLTaskRabbit with Gap and Square with Starbucks.
Whatever is your path to growth, the last thing you want is to run out of cash. Don’t spend on anything that doesn’t drive growth in revenues or efficiency. You should also start bringing in revenues early on in your startup journey. These will help you stay invested so you can go all out on whatever growth channel works for you.