Recently I’ve had some very interesting conversations about business growth and transformation. In my own personal transformation as a business leader I leveraged the standard on the subject by Marshall Goldsmith, “What Got You Here Won’t Get You There.” Here’s my take on the business equivalent.
Startups have it tough. At the same time, they also have it easy. How can this be?
A CEO I worked for once said that the most important aspect of a startup was to have a differentiated product. That “two guys and a dog in a garage” could be extremely disruptive to mature technology firms. This is true.
But the startup has the luxury of being singularly focused on this new offering. To get revenue. To make their first customers successful and happy. This level of focus makes it easier to guide what they need to do.
In the vein of Intentional Revenue™, consider the challenges of a startup:
|Sales and Marketing||Get Revenue
|Product Development||MVP Launch
|Implementation Services||Get first customer up and running
|Customer Support and Success||Keep first customer happy
Pretty straightforward, right?
When you’re 2 people and a dog in a garage, you wear multiple hats. You do whatever is required in order to ensure these challenges are met. I’m not sure exactly what role the dog has, but I’m sure it’s important.
Compare and contrast this with the challenges of growth and mature companies:
|Function||Startup Challenge||Growth Challenge||Mature Challenge
|Sales and Marketing||Get Revenue||Accelerate Revenue||Protect Revenue
|Product Development||MVP Launch||Grow Market Share||Optimize Portfolio
|Implementation Services||Get first customer up and running||Scale to meet demand while maintaining quality||Optimize Margin
|Customer Support and Success||Keep first customer happy||Keep all customers satisfied||Keep all customers that matter satisfied
You’ll note some key differences here. There’s a revenue curve which accelerates and then flattens. Mature companies have a much greater focus on “farming” or “harvesting” than “hunting”. What skills and talent that got you started may not work later.
Product Development starts with a great idea and an MVP. But the people who were there at the beginning might get bored when it’s time to optimize the portfolio. Great features aren’t the sole driver of product investment decisions anymore.
Implementation Services transform from “do whatever it takes” to get a customer up and running to “let’s make sure we don’t lose money”. The focus has changed.
Customer Success and Support is a bit more controversial. A startup wants to keep their anchor customer happy. This often means access to the CEO or whomever is necessary. Growth companies want to maintain that level of satisfaction. At mature companies, however, it becomes understood that you can’t make every customer happy. And that’s OK, but you want to keep the customers that matter most satisfied.
So, it’s clear that what got a startup off the ground and through its initial funding stage(s) won’t get you deep into the growth stage and into maturity. How do you meet the challenge? How do you know if something is missing?
I’ll discuss more about the concept of maturity models and Intentional Revenue™ in the next blog entry. Stay tuned for Part 2.