4. You Must Tap a Hot Market
Being in a rapidly expanding market can make up for a lot of mistakes. But is it a requirement for rapid growth? In addition to a new technology or new application of technology, Jerome Katz says it usually is. "[You need] a tipping-point-type market, where something has been building and all of a sudden it's hot," elaborates the St. Louis University Coleman Foundation Chair in Entrepreneurship. Entrepreneurs can choose to market aggressively and ramp up demand themselves, or husband their resources and build slowly until the market reaches a tipping point on its own. Either way, a fast-growing market is practically a prerequisite for a fast-growing company, Katz argues.
It's a persuasive argument, although it doesn't account for companies like Movex. "The industry is stagnant," concedes Movex founder Suddath. "But it's a $12 billion industry." Under that roof, Suddath, who previously worked in his family's full-service moving business, found ample space for innovation, essentially creating a new market for a service midway between full-service movers and drive-it-yourself truck rentals. The CEO thinks the sky's the limit. "We're hoping to brand this type of service," he says. "People say they're going to U-Haul something. We're hoping they'll say they're going to Movex it."
5. You Must Have the Desire
Inside the chest of every fast-growth entrepreneur beats a heart full of passion for business, says Jeff Williams, president of business startup training and coaching company Bizstarters.com in Arlington Heights, Illinois. Williams is most scornful of the pantheon of fast-growth idols, including the requirements for lots of money, teams of managers and best-in-class products and services.
But after helping more than 4,000 small firms get under-way, Williams does feel that a true passion for the business is essential. "It is so demanding, and almost always takes longer to be rewarded than you think it would, that it requires passion," he says. "You truly love the product or service, you love the selling, you love the customers, you don't even mind customer-service problems."
That's one rule Adams agrees with. "[Passion] plays a role in every startup if they're successful," the serial entrepreneur says. "You'd better be tenacious and you'd better be determined to make that business successful no matter what--even if it requires a lot of sacrifice and late hours."
So is passion the truly unbreakable rule for fast-growth companies? Perhaps, but it depends on what your passion is for. Venture capitalist Biddle points out that for most companies to expand rapidly, the founders must have more passion for growth than for control. "You have to distinguish between those companies that have the capacity to fast-track and those that are willing to do it," he says. In many cases of unfulfilled potential, he says, the reason is that the founder cared more about keeping control than experiencing growth.
The Rules About Rules
Part of the reason that the rules of fast growth appear to frequently be broken may have to do with sheer numbers. After all, there are millions of entrepreneurial businesses in the United States, all unique. "There isn't just one way," Katz says. "You can pick any 50 characteristics you want, and there are a hundred thousand people that fit that model." At the same time, there probably isn't a model without a hundred thousand exceptions.
Is your company one of those exceptions? Adams urges entrepreneurs not to be too quick to follow the advice of investors. "We were fortunate that we had already had some successful startups, so we didn't need venture capital to start it up," she says. "But had I presented [my idea] to [VCs] at the time, they would have laughed me out of the room."
Rule breaking may, in fact, be inescapable for fast-growth entrepreneurs, many of whom attribute their success specifically to being unlike anything that has ever been seen before. "It's something different-a hybrid," Suddath says of Movex. "We're building an industry where there wasn't an industry before."
Mark Henricks is Entrepreneur's "Staff Smarts" columnist.