Developing Your Startup Growth Strategy
The best founders have future-proof plans in place, balancing values and goals with risk strategies. Some gamble on 10x or more growth, trying to become a unicorn (something only one percent of startups achieve). Others launch amel companies, which take a long-term outlook and focus on balanced expansion rather than blitzscaling. And many are now turning to the zebra movement for its emphasis on sustainability, cooperation, community, and regenerative growth.
Whatever the animal, growth strategies help teams confidently position their ventures to get competitive advantages and manage risks.
Here are some key areas to consider, as your startup evolves.
Identifying a value proposition and target market
Start by specifying your target audience’s demographics, taking elements like gender, location, income, and employment status into account. Then examine their pain points. What do they need? Want? How can your products or services provide solutions?
For example, the collaboration app Slack focuses on productivity and ease, appealing to companies with communities scattered across multiple platforms. “Make work life simpler, more pleasant and more productive,” it promises. The pitch worked. Slack launched in 2014, and transformed into one of the fastest-growing B2B SaaS firms ever, before its $28.6 billion acquisition by Salesforce this summer. Co-founder Stewart Butterfield—who also helped launch Flickr—told First Round Review that Slack did this by prioritizing its unique features, then testing and tweaking, always staying mindful of users’ needs.
Tools for writing a strong value proposition include:
- Harvard Business School’s three essential questions.
- A template that explores “the magic fit between what you make and why people buy it,” created by digital strategist Peter Thomson.
- A formula that focuses on benefits over features, devised by Steve Blank, a pioneer in the Lean Startup movement. Fill in the blanks: “We help X do Y by doing Z.”
Do your homework, but don’t get lost in research and suffer analysis paralysis, advises Ran Craycraft, co-founder and managing partner at Wildebeest. This LA-based digital agency creates custom software and mobile apps for brands like Coca-Cola, Disney, and Microsoft. Founded in 2014, it faced early growth challenges from determining its corporate structure to who should be an employee versus a contractor.
“Find your hook¼what you’re passionate about and—most importantly—where your competitive advantage lies,” Craycraft says. “Know what you can do better than anybody else and make sure that remains a core part of the offering.”
Analyzing the competition
And don’t forget LinkedIn, which has a handy “similar pages” function!
Look for ways to position your company through gaps that your competitors do not serve—or don’t serve well. For example, big businesses tend to win on price, thanks to volume of sales and internal efficiencies. But smaller ones can compete on the quality front, offering superior products, services, or buying experiences.
Teams often use the SWOT model to examine strengths, weaknesses, opportunities, and threats. The PEST Analysis can also prove handy in looking at political, economic, social, and technological advantages.
Listen to your prospects and customers
Savvy founders and CEOs listen to their customers and adapt to the market’s needs, evolving their growth strategies to manage their risk. The clothing line TomboyX remains a classic example of this. Spouses Fran Dunaway and Naomi Gonzalez created a company to manufacture high-end button-up shirts. Someone called customer service, asking them to make boxer briefs for women too. Research showed a gap in the market, and 450 pairs sold before the inventory even hit the office. TomboyX built on this success, and today the brand centers on size-inclusive, gender-neutral underwear sold directly to consumers. In 2019, it raised $18 million in its Series B round led by Craftory, bringing its total funding over $25 million.
Craycraft is also a big believer in staying nimble: “We’re big believers in iterative product development. You launch, you learn, you repeat.
“Think of it like lunch. The launch is the first bite of the sandwich, but you’ve still got the rest to go. Don’t blow your meal by choking on the first bite!”
Monitoring your milestones
As your company expands, keep revisiting key performance indicators, which should be tailored to your startup, not the industry as a whole. Consider applying the SMART criteria, developed in 1981 and still going strong:
- Specific: Target an area for improvement.
- Measurable: How will you gauge progress?
- Assignable: Detail who will do it.
- Realistic: State what’s feasible, given your company’s resources.
- Time: When can you achieve the result?
“Don’t get too caught up in vanity metrics,” warns Ashutosh Kumar, founder and CEO of Clappia, a no-code platform. “Indicators can say you’re successful when you’re not.
“For example, maybe an Instagram post gets a lot of likes or becomes a meme and gets popular everywhere. But if you don’t monetize, you don’t really get anything out of it.”
At the end of the day, it’s vital for founders to listen to their customers, iterate as needs evolve, and not treat VC-funding as an end goal. And don’t forget to keep your eye on the long-term prizes—the company you want to build and the legacy you want to create.