The Six Buckets of Growth for Start Ups
nToggle’s 2016 Lunch and Learn speaker series was kicked off by Boston-based entrepreneur, Jennifer Lum, co-founder and Chief Strategy Officer of Adelphic, a mobile DSP. She shared her experience with the six buckets of growth for start ups with us.
Idea Generation and Validation
Founders need to have unique insight into a problem or opportunity that very few others have keyed in on. In this stage, research is essential. If you receive enough validating feedback from smart people across your industry, you and your co-founding team should have the confidence to dig in and see if you can get a company off the ground.
A common investor maxim is that some of the best ideas are the ones that sound the craziest or the least feasible when they are first being seeded. An example of this is Uber...who would have thought taking on the taxi industry was a good idea? Another is Airbnb. How was the fear of letting strangers into your home not a deal killer?
It’s hard when 8 out of 10 people aren’t getting your vision. It’s important for your customers to understand what your values are vs. your competitors if you are to be successful at getting validation and moving onto the next phase. You will meet a lot of naysayers. But if you connect the dots and find positive and trusted feedback from people who are in your field, that’s golden. That’s enough to hold onto.
Bringing the Pain / Selling the Dream
By now, your internal team must have a clear vision and a shared point of view on where your industry is going and how you fit into it. The next step involves selling your vision to prospective investors, employees, partners and pilot customers - so they understand the massive amount of pain that exists without your solution. You need to convince each one of these groups that you will solve this challenge and that they need to jump on board. It’s a very exciting time.
Customer and Product Development
This is the fun part of building the company; your team is building a prototype of your solution. This is where the rubber meets the road and you move past selling the dream. Now you start drilling down into the grand vision to determine what is truly valuable to a large set of paying customers now and into the future.
You’re testing objectives and asking for constructive (and hopefully consistent) feedback.
What will solve customers’ pain in a scalable way?
How will I key-in on the right customers?
How do I convince customers to invest time in helping you understand their requirements?
How can I secure ongoing customer feedback that will help develop our roadmap?
You will discover fundamental changes in the industry and you will need to find a way to close them as fast as you can. Keep up to date with what competitors are doing, but this should not be a high priority for how you are guiding your own business.
Product / Market Fit
Now you’ve developed your product to a state where it is working for customers. They are starting to embrace it and spread positive messages through word of mouth and you’re starting to see inbound inquiries. You are hitting a point where you are a legitimate business with customers and hopefully revenue is starting to ramp. You begin to think about automation and scaling and do a bit of fine tuning to get there.
Two questions you’ll have to solve for are:
Will the economics work for your and your customers’ business?
Can you convert pilots, early adopters and new customers into full paying customers?
You have a product in market and a set of customers that are willing to pay you money for it. This is when you start building the machine and ramp up sales, marketing and operations.
This is an incredibly fun part of a startup’s life, but it is challenging as you are shifting mindsets. You’re no longer the hungry and scrappy team that will do anything to get the next customer on board. You’ve got enough in place that you need to start to figure out how you mature and make your success repeatable and predictable. You are building up to a reliable machine.
Growth is about building a long-lasting, sustainable business. This is the phase in a business’ life where middle management come in to take the business to next level. The board and investors begin to think about international expansion and new lines of business to incubate. Strategic partners come to the table here too. You’re achieving success that is meaningful from a scale and global perspective. From a financial perspective you start to do a lot of financial engineering while also working on things like margin improvement.
Good luck nToggle. You’re off to an amazing start!