'Slow and Steady' Won't Win Your Company Growth, But This Method Will
In theory, for many startups, the slow-and-steady growth plan is terrific. These companies develop their products or services, acquire some customers, iron out the kinks, perfect the model and, voila! It's time to scale. Sounds great, right?
Yet while these steps may be the right choice for some, they're not the optimal strategy.
Organizations like the Good Work Institute -- a notable startup “decelerator” operated by Etsy -- are encouraging businesses to focus on issues like sustainability (rather than fast growth); and for these organizations, the “slow and steady” mindset is gaining traction.
Unfortunately, though, many founders are adopting, and later blaming, this methodology to explain why they aren’t able to grow their companies -- or worse, to explain why they're unwilling to take the necessary risks to potentially grow their companies.
Some explanation is needed: The kinds of founders who insist on waiting until the model is “right” before they scale are frequently (but not always) enabling a type of faux-pragmatism: Using this pragmatism, they're misleading not only themselves, but also their employees, friends and investors.
They’re scared that their companies will never be as great as they'd envisioned, and they know that trying to grow their firms will quickly reveal this to be the case. What will these founders do if they fail altogether?
My company, Sapper Consulting, has tripled its size in the last six months and is poised to repeat that feat in another six months. So, for us, the lesson is that CEOs and founders need to stop pretending they’re waiting for the “model to be right.” That's just an excuse to avoid aggressively scaling.
Acknowledging that you needn't wait for things to be perfect, then, is the foundation for growing any company: In fact, before proceeding, you need a gut check on this issue. Here are four ways to achieve the same rate of successful growth as we did:
1. Create a robust plan, yes, but one with contingencies.
Without having built-in contingencies, a plan for success is a useless fantasy. Think through worst-case scenarios, and insert triggers into the plan for when to enact each contingency.
Planning for emergencies -- whether that might entail an an unforeseen weather event, a regulatory change or a software malfunction -- is the only way to ensure the business will stay up and running, no matter what. Have a safety plan, back up all data, keep employees up-to-date on emergency procedures and know what aspects of the company are vital for its continued survival.
Contingencies are not always negative. Plan for positive contingencies, too. For instance, what if goals are exceeded more quickly than expected? What if there’s a possible acquisition in the midst of hypergrowth mode? Positive contingencies are as important as negative contingencies.
2. Prepare new salespeople quickly.
Growth won’t happen for a company with a sales team that isn’t able to do its job. Marketing Donut reminds us that typically, just 2 percent of sales go through on a first meeting. But salespeople need to be able to establish trust quickly to change that figure. To finesse the requisite skill set, they need the right training.
Every team is different, so even if salespeople with years of experience join a new team, they need to be brought up to speed on the new company’s processes.
Outreach, for example, a fast-growing enterprise-communication platform for sales, gets its salespeople ready to close new customers by their second week on the job. The company’s secret to this quick and effective training? An extremely robust and programmatic sales-training regimen is in place, of course, but it's also one that ditches the mindset that new salespeople take months to ramp up.
So get them out there. Train your new salespeople; then set them loose to do their jobs.
3. Test, act and test again.
Testing before taking action is important, of course, but equally vital for any company is retesting. And nobody believes that more than marketers themselves: Out of 1,000 marketers surveyed in a study by Adobe, a mere 40 percent considered their respective companies' strategies to be totally effective, and only 9 percent said they felt confident that their digital strategies were accomplishing their goals.
Marketing, in fact, is changing so rapidly that many executives in the field forget to retest strategies that may not have fared well a year ago. They may be mistakenly thinking those strategies won’t work today. But that may not be the case.
Blue Wheel Media, a boutique marketing agency that nearly doubled its business last year, credits its success to repeated testing of methods that didn’t work in the past. My own company has followed suit. To maximize our marketing spend (and the spend of our clients), we are always testing and retesting tactics. You just never know . . .
4. Don’t be a “deal-killing” CEO.
It’s common for CEOs to find every reason in the world not to agree to negotiated deals prepared by their sales teams. The margin isn’t high enough, the terms aren’t exactly right, etc. etc. These CEOs may be persuasive, but that attitude zaps the productivity and motivation of salespeople -- and sometimes the organization itself.
Gallup says that roughly only 34 percent of American employees are engaged at work; so don't demotivate workers further from trying their best. Engaged employees can make or break a company: Companies that are able to double their engagement numbers bring in 147 percent more revenue, on average.
Sometimes, CEOs need to agree to less-than-optimal deals with customers to get the ball rolling. For example, my company had a salesman in a major slump. He even brought in a break-even deal. We signed it. Why? I needed him to gain momentum. Since then, he’s become our most productive salesperson, signing as many as 10 customers a month. Sometimes, it’s better to start collecting new customers (even if the terms aren’t ideal) than to wait for the perfect contract to come through.
In the end, "slow and steady" may work for a tortoise, but startups need a plan of action that allows them to move quickly. Preparing contingency plans, boasting repeated testing and having a motivated sales team helped my company double its size in a six-month period.
Use these steps to propel your startup to similar success.