In 2014, a friend of mine arrived at dinner wearing these big, bright, ugly, orange-lensed safety glasses. I thought he was playing a joke on me. We weren’t in a five-star restaurant, but people were dressed nicely and his look was out of place. Eventually, I had to ask, “What’s up with the safety glasses?”
He explained that his lenses were made to block out artificial blue light. Devices like cell phones emit this blue light that affects the level of melatonin your body produces, a chemical that helps us sleep at night. Essentially, he said, blue light tricks your body into thinking its daytime.
Like a bolt of lightning, it all made sense. My long-term sleeping issues and lack of productivity during the day may have been from overexposure to blue light at night. I decided to perform an experiment: I went home and pulled out a pair of yellow-tinted ski goggles. Although they looked ridiculous, I wore them an hour before bed for the next week.
I slept like a baby.
But there was one problem. I couldn’t wear them in a social setting without people thinking I was some weirdo. Not wanting to disrupt my newfound healthy sleep pattern, I felt stuck in my apartment. I thought, “What if I could create a blue light-blocking lens and put it in a stylish glasses frame?”
What I didn’t do
I didn’t try to invent a new product. I simply took an existing product — blue light-blocking ski goggles — and adapted them into something fashionable. I thought of a friend who had taken yoga mats, made them one foot longer, and called them “extra-long yoga mats.” He made millions.
My youngest brother, Tristan, had just left his job as a reporter at a newspaper. I didn’t fancy the idea of dealing with manufacturers, and since Tristan was a natural investigative reporter, I figured he could source and vet a decent Chinese manufacturer. I decided to partner with him: He could source the product and deal with the manufacturers while I concentrated on strategy and marketing.
We had dozens of prototypes made from three Chinese manufacturers. Some were effective but looked ugly. Others looked stylish but weren’t effective.
I had to create the perfect glasses, so people would feel confident wearing them in every social setting, without sacrificing quality and effectiveness. I handed out prototypes to friends to get their input. We chose the current version based on their feedback.
Testing the eCommerce waters
We placed a minimum order of 300 pairs, built an Amazon page and launched on Black Friday 2015. On Day One, we sold four pairs. It wasn’t much but we were ecstatic. The next day we sold five. Then six or seven orders trickled through every day thereafter. We broke even in two weeks and sold out in a month.
It proved there was a market for this product. The only problem was that we hadn’t ordered any more than the original 300 pairs. We soon realised that it was Chinese New Year and the manufacturers had shut down. We couldn’t sell any glasses in January 2016. Or in February. None.
We used the downtime to take courses in selling on Amazon and asked for advice from friends. But when the next order arrived, it felt like we were starting from scratch. Sales slowly trickled in. We’d lost momentum.
Though getting back to our original pace took time, we learned some invaluable lessons along the way. Some seem like no-brainers in hindsight, but with a new venture, learning these key elements is (eventually and very essentially) part of the journey.
Credibility: Customer testimonials influence people to buy in a pretty powerful way. So we reached out to customers and begged them to record a testimonial. I called in favours from broadcast personalities with big podcast audiences. I was interviewed on shows like Bulletproof Radio about the dangers of blue light. We saw a direct correlation between podcast interviews and sales spikes.
Snapchat: I focused on growing my Snapchat following and often wore the glasses. Soon enough, customers started sending photos of themselves wearing the product. I’d take a screenshot and share it on my Snapchat. Gradually, more followers starting buying and sharing photos on their social media. It felt like we were creating a modern health revolution.
Upsells: We didn’t offer any upsells until late 2016. If someone wanted to buy one pair of glasses, maybe they’d want another pair at a discount. Or maybe they would want a sleeping mask. The moment we offered an upsell, we made more sales and more revenue. Not offering an upsell quickly enough cost us at least $100,000 in lost revenue during 2016.
Split Testing: We didn’t test the price, headlines or images. We didn’t test much at all. We’ve done very well but would have doubled our revenue had we tested these elements earlier in the process.
Leveraging expertise: We’ve partnered with my first online business mentor, Tai Lopez. We had a great relationship because I was Tai’s top sales guy back in 2015, so when he saw what we were doing, he suggested coming on board as a partner. Tai is one of the biggest social media influencers out there and has taught me much of what I know about online marketing.
He’s a master of strategy and is helping us take the business to the next level.
This article was originally posted here on Entrepreneur.com.
Proven Strategies To Grow Your Start-up On A Scale Following These Guidelines
The following strategies can help you make the start-up scalable and grow it to accommodate a larger demand.
Scalability and flexibility are important properties of any business. Let’s say you’ve managed to build a successful start-up. It’s profitable and promising, but you want it to become better. The scalability of a business involves its ability to adapt for bigger workloads without losing revenue.
Even if your business is currently small and doesn’t generate huge profits, scalability can help it turn into a large enterprise. The wrong approach to developing a start-up can deprive it of an opportunity to become better.
The following strategies can help you make the start-up scalable and grow it to accommodate a larger demand.
Scaling Vs Growth
Many companies make a mistake of thinking that scaling and growing a company is the same thing. In fact, growth involves increasing revenue or the size of the company (the number of employees, offices, clients).
Constant growth requires numerous resources and may not always lead to a proportional revenue increase. In many cases, the growing number of services or products needed to boost revenue involves high costs related to the growing number of employees and equipment.
On the other hand, scaling allows you to increase the revenue without the costs involved in growth. You can handle the extra load and boost your profits while keeping the costs to a minimum.
At some point, a successful start-up needs to make a choice between growing at a constant rate and switching to the scaling business model.
Even though a single clear method for scaling your business doesn’t exist, there are some guidelines you can follow.
1. Get Ready To Be Patient
Scaling is not a quick process so you have to be patient. The overnight success story is not about you. In fact, scaling too fast usually results in unfortunate failure.
Allow yourself to spend the time to understand who your ideal customers are and how you can solve their problems in a better manner. Make sure you understand how to be confident about the new volume of your work.
Do research to find out how you can find the right resources to achieve scaling rather than growth.
2. Choose The Right Software
The lack of time and team members is a common problem for a startup looking for scaling methods. That’s why they need to try and automate as many processes as possible. This can be done with the assistance of the right software.
- Trello – to simplify in-office and remote teamwork
- MailChimp – to improve marketing campaigns
- Brand24 – to get insights about your business
- Survicate – to collect customers’ feedback
- Voiptime – to increase connectivity.
3. Take Advantage of Outsourcing
Since you are hoping to limit the expenses while growing the revenue, you have to find ways to spend the revenue in the right manner. The biggest mistake made by business owners who think they are choosing scaling is hiring a big team. By doing so, they turn scaling into growing.
Your best bet to avoid hiring a large team and paying large salaries while achieving your plans is to outsource. Using your resources wisely involves finding freelancers and remote employees who are willing to work for a lower pay on a one-time (or several) contract bases.
For example, you don’t need a lawyer or a computer specialist sitting in the office all day long. Why should you pay them a monthly salary?
4. Don’t Do It Alone
Even though certain team minimisation is necessary to improve your scaling efforts, don’t try to handle everything on your own. It’s important to have at least one person you can rely on to manage the business-related problems.
Scaling your start-up is possible as soon as you understand what scaling is in detail. You need to be careful not to start growing your business instead of scaling it in the process. Once you have all the fundamentals figured, resources managed, and the right people in place, you are ready to start.
Selling The Cape Town Lifestyle In China
GSB alumnus Grant Horsfield has built a rapidly expanding business in China that aims to provide a better lived environment – both at work and at play – and deliver a more balanced, sustainable and enjoyable lifestyle.
When Grant Horsfield moved to Shanghai, shortly after completing his MBA at the GSB in 2004, he wanted to find a product to sell to China, when the rest of the world was focused on buying from China. “I had a clear purpose,” he says, “I wanted to import something from Africa and bring it to China – I just didn’t know what it was.”
Horsfield had completed the Doing Business in China elective on the MBA programme, taught by Professor Kobus Van der Wath, which led to him accepting a job in China with Van der Wath’s consulting firm – The Beijing Axis. He also completed an exchange programme at Jiao Tong University in Shanghai. During this time, although he found China to be exciting and full of opportunity, Horsfield missed the Capetonian lifestyle – particularly the outdoor life and the interaction with nature.
He says, “that was when I realised that the product China needed was the lifestyle that we have in South Africa. I was sure that if the Chinese knew what they didn’t know, they would be living a more balanced life and be able to appreciate and relax in nature – so that was what I really wanted to import to China, the Cape Town lifestyle.
“At that point there was no concept of a weekend getaway spent relaxing in nature that we are so used to in South Africa,” Horsfield explains. This realisation kickstarted his vision for Naked – a chain of boutique eco-resorts set in natural landscapes across China.
The naked Group, which Horsfield founded in 2007, has built and now operates four luxury resorts with a further six under development. The first boutique resort, naked Home opened in Zhejiang Province in 2007, followed by naked Stables – an award-winning resort in Moganshan which offers horse riding to guests. Naked Stables is an industry pioneer in that it was the first resort in China to receive the prestigious Leadership in Energy and Environmental Design (LEED) Platinum certification – an American certification system encouraging the design of energy and resource-efficient buildings that are healthy to live in. Horsfield extended the concept of a luxurious retreat with the addition of naked Castle, a 95-room castle with two restaurants and a spa surrounded by lush forest, and naked Sail which offers a unique travel experience on a 70-foot catamaran in the Andaman Sea.
In 2015, the naked Group expanded into the co-working office space industry through naked Hub. Horsfield sees the move into office space as a natural extension of the naked brand.
“Essentially we had been inviting people to have a better lifestyle outside of work and we realised that we could do that in the work experience too,” he says. “When you build a resort, you build a space that allows people to experience a certain level of comfort and enjoy themselves, so why not do that in an office?” The naked team’s skillset in designing and building sustainable comfy resorts was easily transferred to building office spaces that people enjoy working in.
Naked Hub has seen rapid expansion, opening 50 hubs across China, Vietnam, Australia and the UK in just two and a half years. Initially based on smaller start-ups or freelancers in the gig economy, Naked Hub now caters to larger firms. “The idea of co-working space was born out of trying to make a more efficient smarter space for smaller companies but today more that 50% of our companies are multinationals,” says Horsfield.
The principles of a more balanced lifestyle and a cleaner more sustainable environment are present in all naked projects. For Horsfield, it’s all about trying to make the world a better place.
“No matter what kind of entrepreneur you are, you have to have some values that are important to you. For me, trying to change things for the better has been paramount in everything we’ve designed, and we probably have more sustainability experts on our payroll than most companies. What we do is not just about building, it’s about people, communities and how people interact in their environment.”
Commenting on what it takes to start a successful business in China, and then follow through with rapid global expansion, Horsfield says perseverance, a belief in what you want to achieve, and above all – courage – all play a role.
“You’ve got to have courage to do what looks very scary. If you don’t have a sound belief that it will work, then you just can’t do it.” He adds, laughing, “or as my mom says – I’m just too stupid to see the potential problems! But seriously, courage is what separates businesspeople from entrepreneurs – and that’s something that can’t be taught.”
Horsfield also believes strongly in what he terms AQ, or adversity quotient. “This is the mentality that allows me to overcome obstacles, the ability to hit a wall 20 times but pick myself up and keep on trying.”
Looking back on his experience of the MBA, he believes the programme’s value lies in promoting self-knowledge and reflection. He says, “each project I did allowed me to examine what I had done before and to consider how I could have done things differently. Examining my strengths and weaknesses was a huge benefit. Today I don’t hire people who have low self-awareness.”
“The other wonderful thing about the MBA was the diversity of students. We had a mixed group internationally, with people from many different cultural and work backgrounds, that was really enlightening. It also gave me a strong network of likeminded people.”
Horsfield believes his South African upbringing and his education at the GSB certainly helped him on his entrepreneurial path. He says, “wanting to do some good in the world, wanting to change things for the better, is a uniquely South African strength.”
What Are You Prepared To Lose?
While business growth tends to be a major goal for most business owners, with growth comes pain. Here’s how you navigate those challenges.
Many, perhaps most entrepreneurs would like their businesses to grow — whether from ambition to create an empire or just to reduce the risks inherent in being a little business. To do so the entrepreneur has to change roles. They must move from where they can control everything, and change from working as they always have. Being human, we fear moving away from familiar routines, we find it hard to give up authority and we lie awake at night worrying if we can afford all those extra people.
When you run a small business you make all the decisions, you monitor performance of your employees, have direct contact with customers and have a small nest egg so you can still pay your people in bad months. A bigger business means higher overheads, more debtors, and additional inventory, all of which will put a strain on cash flow. You are likely to need more working capital to finance growth and may have to take a loan, which only adds to the risk.
You are also likely to have less day-to-day control over operations and will worry about whether your managers are about to commit an appalling blunder. A more insidious risk is the growing distance between you and customers as the business adds layers of sales managers, sales people, project managers, and branches.
Finding the opportunities
It’s difficult enough just to stand still in tough times, let alone grow strongly. The more difficult the competitive and economic situation becomes, the more we want to control every aspect of the business. We hesitate to fill vacancies, clamp down on expenses, get enraged when people make mistakes and push the sales team until they get nervous.
We develop a hang-in-there mentality and hope for better times. Paradoxically, tough times offer great growth opportunities. While others cut down on training and marketing, you have the opportunity to lure customers away from them with aggressive marketing and pricing. You can build a work environment that will attract the best people by offering strong customer support and good development opportunities. If you are bold, you have the opportunity to lock in the best suppliers by paying on time and signing long-term contracts while others delay payments and seek cheaper suppliers. It takes courage to do this, and you will feel the loss of security and comfort zones.
In this rapidly changing world, it may be easier to grow a business now than it has ever been. Businesses that embrace change and look for opportunities in uncertainty can scale rapidly. Disruptive technologies have changed the rules and allowed new businesses to grow to international giants. Waste — especially packaging waste — green energy, medical technology and urbanisation have all presented global opportunities for smart entrepreneurs.
Change is difficult to manage; we prefer our comfort zones, but treating change as a friend rather than a fear could give your business the growth spurt you desire.
Letting go to move forward
One of the hardest things to do as a business grows is to discard products, people and processes that have built your business to where it is today, but will be a hindrance to you as you grow. You may have a favourite product that was the essence of your start-up, but is now out of date and uncompetitive. Kill it.
There is pain in dealing with staff and suppliers who will not be able to keep up with your growth, especially those who stood by you when you needed them. I am all for loyalty, but if loyalty becomes a hindrance you must act. Be kind to them, give them their dignity rather than carrying them as a charitable favour. Change their roles, or find alternate work for them. Getting rid of encumbrances, products, people, suppliers, customers and processes is all part of what you need to do to take your business into a growth phase.
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