When your start-up is just getting off the ground, leading large numbers of people isn’t at the forefront of your mind — survival is. You just want to keep the lights on, put food on the table, and grow your idea into something great. However, as that newfound product or service you developed gains traction, so too does the growth of your company, which means you can’t be the same leader you were yesterday.
The leaders who don’t adapt to change typically fall, along with their companies. Just ask Encyclopedia Britannica, Sears, Blockbuster, Kodak, or myriad other companies that fell from grace.
Making the mental pivot from small-time to big-time is an evolutionary process. The mental shift doesn’t just happen once and then you forget about it, “high five,” spike the mic, and walk away. Rather, growth is constant and if you’re not looking for the next opportunity to scale your business, you should be, because your competitors are.
Companies go through growth stages; lifecycles of peaks and valleys that cause it to ebb and flow with the current of the competitive landscape, which means the leader’s mindset needs to flow with it.
If you aspire to grow your company, here are four things to remember when bridging the gap from small to large scale:
1. Put the brakes on telling
As a start-up leader you’re typically telling others what to do, not in a dictatorial-rule sort of way but because you have a clear vision of what success looks like in your head. You have a small team and it’s easier and faster to tell them what to do. Such is no longer the case as your company grows.
As you evolve into the role of an organisational leader, you must shift from dictating (ok, maybe it’s called directing) to guiding and coaching others so they come to new discoveries on their own. If you don’t, if you continue holding people’s hands, then they’ll never grow up to be big kids.
The best way to build trust is to extend it, which means reining back from doing everything yourself and instead letting others figure things out for themselves and trusting that they will. Of course, the challenge of doing so is a two-headed coin, with immediate gratification on one side and a lack of human capital investment on the other.
Sure, you can get in the weeds and solve the problem yourself, but you can’t do that every time. If you do, your company will never maximise its potential.
3. Flatten the silos
Don’t let the stovepipe effect form. As companies grow they tend to segment their sales, marketing, finance, and other business units into silos where each has its own focus and nobody collaborates with each other, a classic case of adults not wanting to share their toys. Don’t let this happen.
Aim to build consistency in communication by sharing your vision, goals, strategies, and updates with the entire company. This way, you also eliminate individual interpretation because everybody hears the news from the horse’s mouth.
4. Create consistent feedback loops
One of my major pet peeves in working with teams (aside from laziness, the word “agility,” and slow drivers) is the frequency of feedback given to each member, which is typically annual, or even worse, biannual.
If a behavioural correction can wait six months, then it’s not that big of a deal. Likewise, if a short-term win needs to be celebrated, don’t wait until the Christmas party to do it. Nobody will remember it by then, anyway, because they’ll all be hammered (which is synonymous with intoxicated, in case you are wondering).
Taking your startup to the next level requires a shift in mindset from focusing on the short-term to the long-term. It doesn’t happen overnight. Set a date for what you want to achieve and then outline small goals every day to help you get there – and follow it religiously.
This article was originally posted here on Entrepreneur.com.
How To Build A Community Around Your Brand
There’s a way to build your market without spending a fortune on advertising and marketing — and it’s called community building. Here’s why this should be the cornerstone of your growth strategy.
In their first three years of business, social media management tool Hootsuite grew from zero to three million users. It’s an impressive feat for any company, but what’s even more notable is that they did so with virtually no advertising or marketing budget.
Instead, they grew through community building. A team of 18 staff members and 100 influencers grew the company in a grassroots manner — all thanks to community engagement, according to their CEO Ryan Holmes.
Below are five steps that you can use to grow your brand or company using community building as a key strategic tactic.
1. Define what your brand is and what it stands for
Before you can build a community around your brand, you have to know what that brand is.
Related: How To Build A Billion-Dollar Brand
Do you have a mission statement? Do you know exactly who your target audience and community is? Do you have the content ready and armed to engage this community each and every day?
Here’s a classic example: The colour pink doesn’t try to make itself greener, hoping to appeal to everybody who loves both. Pink is pink, and you either like it or you don’t. There are no apologies and no justifications.
So, what’s your ‘pink’? What do you stand for that nobody else does? What type of people do you want in your community and, more importantly, who don’t you want to include?
Move on to the next step only after you’ve answered these questions.
Offer value and exclusivity
The best brands offer their communities:
- Emotional safety
- Personal investment
- Insider status.
2. Find the right way to connect to your community
Once you’ve identified what your brand stands for and who you are wanting to target, the next step is the ‘where’ and the ‘how’.
That means choosing the right platform based on the following:
- Size of your audience
- How your audience prefers to engage
- The features you need
- Your technical skill level
- Your budget.
When you’re first starting out, think small and simple. A basic forum might be enough for your website, or my favourite, utilising Facebook groups if your users access it via mobile devices. Remember, Facebook organic reach is dying at a rapid pace, so groups will be the ideal way to interact directly with your customers.
Use these test forums to see how your community members interact. As their numbers and engagement grow, you’ll be better equipped to choose the right platform down the road.
3. Make community membership valuable and exclusive
There are five factors that make joining a community valuable for customers:
- Emotional safety
- A sense of belonging and identification
- Personal investment
- A common symbol system.
Your community members need to feel safe sharing with others in your group. They need to feel that they’re accepted and that they’ve ‘earned’ their spot in the community. They also need to be able to understand the group’s social norms and how to communicate like an ‘insider’.
How can you build these factors into your community? Possible strategies include:
- Clearly defining and enforcing moderation standards
- Limiting membership to a select group who have achieved certain status (perhaps, by buying a product or opting into a challenge or course from you)
- Encouraging the development of inside jokes and memes
- Giving top users benefits — even if it’s just icons for use in their posts that denote their status, or free products, discounts, invites to secret events and so on. In other words, make it exclusive.
4. Get the community talking to each other
Every community will go through an ‘awkward phase’ where conversations feel a little forced and people aren’t initiating conversations on their own. It will pass. Keep building your community one person at a time, and it will eventually begin to flow naturally.
Don’t be discouraged by lack of engagement or feedback — If you have customers within the community, they are seeing your content and taking it in, they just need a little time to come out of their shell.
The key? Keep providing value.
5. Give more than you get
Lastly, why would your users remain part of your community if they aren’t getting any value out of it? Invest whatever resources you have into creating a stellar community experience. Provide helpful resources. Answer questions. Offer whatever support you have to in order to delight your community members.
Your efforts will come back to you in the form of engaged followers, future purchases, and possible referrals.
What’s Stopping Your Business From Growing?
Three masters of scale unpack the reasons why you might be failing at growth – or in danger of doing so.
So, what’s stopping you from scaling? If you ask Rich Mullholland, founder of Missing Link, the reality is that most entrepreneurs don’t need to understand what it takes to scale. “Scaling speaks to exponential growth,” he says, “which for the vast majority of business owners simply shouldn’t be a consideration. Growth by itself is okay, and even then, it should be growth as and when it’s required.”
Rich’s key point is that growth for the sake of growth should never be a business owner’s primary goal. Growth should be strategic, and good for the company. Growth without a solid foundation can actually harm – or even kill – your company.
If your goal is growth though, here are three key points to keep top of mind.
1. Too many business owners don’t understand what it takes to scale a business
“Entrepreneurs are so focused on getting through the month with their cash flow intact that they often fail to lift their heads and look to the horizon,” says Allon Riaz, CEO and founder of Raizcorp. “Scale requires strategic thinking, while most entrepreneurs are in operational thinking mode.”
Howard Mann, president at Brickyard Partners and a US-based business turnaround specialist, advises business owners to stop focusing on revenue growth alone. “Scaling a business is about balance and too many entrepreneurs just focus on the speed of revenue growth. When revenue grows without the infrastructure to support that growth, clients leave as quickly as they come in.
“Instead of focusing on top-line growth, focus on maximum profit margins. This will completely change where you focus your efforts. I would rather have a $10 million business with 50% margins over the false glamour of a $50 million revenue business with razor thin profits.”
2. Without the right systems, process and people, you’ll never be able to scale
Allon believes the biggest mistakes entrepreneurs make are:
- Not arranging sufficient cash reserves for a growth period
- Believing that the people who brought you to point A are the same people who will take you to point B
- Having insufficient systems to scale the business
Rich agrees, adding that you need to focus on the business you want to be, and not the business you currently are. “Businesses often commit legacide,” he says. “They allow the legacy systems, put in place for a business of a smaller stature, to hold them back. Not to get too cheesy here, but to quote the Great One, NHL hockey legend Wayne Gretsky, you need to skate to where the puck is going. The systems you put in your business should be systems appropriate for the business you want, not the business you have. Sure, you’ll possibly be paying more in the short term, but it will be a fraction of what you lose trying to play catch-up later.”
Howard believes that losing track of managing the expenses required to manage growth is one of the biggest stumbling blocks entrepreneurs face. “To intentionally over simplify it, you want to figure out the most efficient and effective way to rapidly attract and close new clients while being able to serve and delight them at the lowest possible cost,” he says.
“Another mistake is taking on too much debt in the name of growth. We are all mesmerized by VC backed start-ups that put out press about their massive growth. You do not see how much cash they are burning through and that most of these companies have net losses that are growing as fast (or faster) than their revenue growth. Again, protect your profit margins. That is your growth fuel and protection against shocks in the economy.”
3. Growth for the sake of growth can actually kill your business
Before you embark on your growth journey, understand that growth, without sufficient structural foundations, can often lead to a business collapsing. “Some scale has the opposite of economies of scale, and actually becomes more expensive as the business becomes more complex,” says Allon. “It’s important to restructure the model as the business grows to ensure the highest possibility of economies of scale.”
Howard warns that a business structured to lose money as it grows is a poorly structured business. “Making the switch back to strong profitability after a growth phase is difficult to pull off,” he says. “Yes, we all know Amazon.com eventually did it. You are not Amazon.com. Growing with a net loss is a straight road to the business graveyard.”
Rich disagrees with the notion that growth in and of itself will lead to death. He believes that growth is, generally speaking, healthy. “I’ve seen businesses grow too quickly and not know how to deal with it, and I’ve seen businesses that out-grow the maturity of their management teams and get strangled by the firm hold the management team try to keep,” he says, but for Rich, this is the product of a business ill-prepared for growth, rather than a product of the growth itself.
“This is why slow is often better, as opposed to scale,” he says. “I remember when my son was young, and I was still his hero. I couldn’t imagine him shouting at me the way I did to my folks as a teenager – I’d be destroyed. So, I asked my dad about it, he smiled and said, don’t worry kiddo, they ease you into it, it all happens over time. By the time they start screaming, you’re ready. That’s true too for business growth. Most entrepreneurs are running their businesses as a real-time business school. You can’t always rush that education.”
Allon: One top tip for business owners on scale is to remain strategic by knowing what you want to create and by ensuring a healthy balance of capital resources, sufficient people skills and the appropriate support systems.
Howard: Famed business owner Ricardo Semler said “Only two things grow for the sake of growth: Businesses and tumors.” Get crystal clear on why you want to grow. Once you do, find your balance between accelerating new business and the cost to manage that business.Scaling, like a scale, needs balance
Rich: Stop thinking about scale, and start thinking about solving an important problem that world has, even (especially) if they don’t know it yet. It the problem is real, and big enough, you will have a scale-able business.
See Allon Raiz, Rich Mulholland and Howard Mann live at the first Secrets of Scale event, which will be taking place at the MESH Club in Rosebank on Thursday, 24 May. Buy your tickets online here: www.qkt.io/secretsofscale
You Too Can Grow A Successful Subscription Company. Here’s How
Dog toys? Baby stuff? Puzzles? Makeup? How can you think ‘outside the box’?
Subscription companies have a unique opportunity to connect with their customers. By offering a recurring product, they get multiple chances to interact. Products range from razors like those sold by Dollar Shave Club to wristwatches like the ones we offer at my company, Watch Gang. Then there’s BarkBox, which treats your dog to a monthly shipment of toys and treats. These companies are vastly different but share a common goal: Curating a high-value experience for members.
Thousands of businesses have adopted the subscription model. We’re seeing new companies launching all the time, in every niche, from Sock Work, which sends monthly socks and donates some of its revenues to veterans, to iFind Seekers, sending monthly puzzles.
What may be surprising to some is that businesses offering a recurring product have been around since the dawn of commerce: The Romans sold and delivered food and newspapers on a repeating schedule 2,000 years ago. In this country, weekly milk deliveries were common even before the Constitution was written.
Interested in establishing a subscription business for your product? In my experience, I’ve come to recognise what I call the “five pillars” for the foundation of a successful and sustainable subscription business. Those pillars – community, value, discovery, service and integrity – are exactly what you should focus on:
Pillar 1: A thriving community
Having a community of enthusiasts speaks volumes about your company. It’s a sign of trust and brand affinity, and proof that people are genuinely interested in what you have to offer. They are willing to share their experience with others.
Your community is a trusted group of peers who are more than ready to authenticate a product, provide feedback on the service and help create a sense of belonging for like-minded members.
Your community drives your business forward, motivates you to improve and helps you craft service improvements. You have to be dedicated to growing and nurturing your community, because ultimately it is the backbone of your business.
Pillar 2: The delivery of value
Consider this: Why would customers want to “set it and forget it” when they can just order when it’s convenient for them? Why would they agree to a recurring payment every month for your service? The answer is value.
People have to get a product far more valuable than what they are paying for, which means you as the company founder have to go above and beyond to deliver added value.
Watch Gang, for instance, has price levels to fit all budgets, from $29 to $999 a month, and the watches members receive have a value that’s higher than their membership fee. At Barkbox, a $20 box is valued at over $40. Bluum, which offers a box containing the best-reviewed baby, toddler and mom products, has a monthly subscription fee of $34 with the box’s guaranteed retail value at $45. These are tangible savings, and for customers they provide convenience.
Apparently, customers agree. A Gang member recently sent a testimonial that stated, “My Watch Gang subscription is the only bill I actually look forward to paying every month.” A bill that’s welcome? This tells me that we have honored our commitment to delivering value.
Pillar 3: Opportunities for discovery
Subscription companies need to serve as a point of discovery. One of the reasons why subscription businesses continue to be so successful is because of the element of surprise — people love to open a box without knowing what’s inside. Subscription boxes give members the opportunity to discover new brands and styles.
Companies today are engaging members beyond just the monthly shipment. Birchbox offers loyalty points and money back for purchasing the full-size version of samples. At Watch Gang, we launched the “Wheel of Watches,” where members can spin a virtual wheel full of watches they may be interested in.
They earn points to apply to the wheel every month they remain a member. This has become one of the biggest draws at Watch Gang, because it provides an entirely new kind of discovery experience – and it’s fun.
Pillar 4: Amazing customer service
While not a subscription box, Zappos has repeatedly been recognised as a shining example of how to treat customers. The often forgotten, but arguably crucial, benefit you can provide to a member of a subscription company (or any company) is world-class customer service.
Of course it’s easier and cheaper to outsource customer service or offer email-only support to cut costs. But you have to remember that every call, every customer and every situation is unique. Your customers deserve exceptional service from real people whom you’ve empowered to solve their problems.
Some of the most important changes your company can make may revolve around your customer service department. A single phone call can have immense impact. Having a well-trained customer service team gives your company the opportunity to learn from valuable feedback.
It’s crucial to give your team members a voice in your business and encourage them to share what customers are saying, both positive and negative. These team members are on the front lines with your customers every day, so they need to be adequately supported and compensated.
Pillar 5: A high standard of integrity
Without a sincere commitment to the above four pillars, your subscription business may never be profitable or sustainable. That’s why maintaining a high standard of integrity means you put people over profit. You need to take a stand to help your customers and deliver on your promises – even when that might cost you.
Every time a customer reaches out for support, you have an opportunity to demonstrate your integrity. It’s not an opportunity to make more money from the customer or even to deter him or her from canceling. It’s an opportunity for you to shine, as a beacon of good morals.
Set an example for all your employees and team members from the top, and it will trickle down to all day-to-day dealings within your company – with your customers, with your shareholders and with the public at large.
Today, anyone can launch a subscription business and start selling memberships; however, the businesses that will stand the test of time and truly become successful are those built with a solid foundation using these five pillars.
Investing time and resources into these five areas will help you not only grow quickly but also stand out as a company committed to taking care of its customers and employees.
This article was originally posted here on Entrepreneur.com.
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