Startups must hit the ground running in order to make the most of their initial capital, and the race to profitability can get pretty intense. It’s no wonder, given some of the more dire statistics on startups, that some entrepreneurs can drive themselves crazy looking for that first surge of profit.
While there is no one-size-fits-all advice for every startup business, here is some general advice I’ve picked up from my own entrepreneurial journey in the solar energy industry.
Most successful businesses made it to the top not by simply inventing an emerging technology or revolutionizing an industry, but by identifying a real market need and discovering a solution. This can happen in any industry and on any scale; even what seems like a cog in a machine can spell profits, if the machine can’t operate without that cog.
There are plenty of great ideas, but the reality is, there’s often no real demand for them. Finding demand for your offering is vital, and spurring growth means not just following demand as it evolves, but anticipating it too.
For me, growing a company in the solar energy space meant staying on top of developments in the climate science and regulatory arenas and adjusting both our product and services accordingly. We identified and segmented our customer base while opening the floor to them to discover why they were interested in renewable energy, and then we created products to suit individual needs. It may not seem scalable at first, but it’s what leads to stability for your business: a foundation upon which you can implement more aggressive growth tactics.
Not every startup can land itself on the cover of Forbes. Most of the time, slow and steady wins the race. Many startups are tempted to chase big customer acquisition wins, spreading their resources around a bunch of channels and trying to scoop up as many potential customers as possible early on.
The problem with that approach is that customer acquisition will be one of the biggest expenditures, and you could risk sinking all of your capital into an effort that will yield a much smaller percentage return in terms of actual, qualified customers who lead to revenue for you.
It’s far better to focus your acquisition efforts on smaller, more qualified market segments, making incremental investments in order to build profitability over time. You want to make money as quickly as possible, but for startups, wasting money on customers who won’t convert could drag your business under before you have a chance to convert the qualified ones.
You might be tempted to cut corners in order to raise profit margins on paper, but while you might see an initial revenue bump, that tactic will ultimately cut your growth short and do more damage to your brand in the long run. Build a strong customer base by investing your startup capital in talent and, if applicable, quality materials, and by making the end-user experience the best it can be.
When we were building our clean energy startup, it was a top priority to put together high-quality solar cell systems using the best materials, responsibly sourced in line with our environment-first philosophy. That said, we also made sure to implement tight processes and protocols internally, from sales to installation, to ensure that the entire process was streamlined and painless for the customer. It was important to us that our systems were built, delivered and installed on time and under budget. Great reviews and referrals from our customers were a huge part of our initial growth. Again, it may not seem scalable, but it works.
The bottom line is that there are hundreds of articles out there promising magic formulas and “hacks” for growth, but only you know your business and your market. If you are looking for general, scalable growth tips, remember the following:
Guiding a company at any growth phase is no easy feat. In fact, rapid growth comes with a slew of challenges, but the lessons you encounter throughout the journey will help you be prepared. In time, you won’t be worried about how to grow your startup; you’ll be learning to adapt to keep up with the movement your now-large company is doing.