Aaron Ross and Jason Lemkin have a good understanding of what it takes to build a company quickly.
Ross helped Salesforce.com's outbound sales operations grow from nothing to $100 million in only a few years. Lemkin developed Echosign and sold it to Adobe for millions of dollars. Now he invests in other fast-growing businesses.
One thing they've discovered is that there is a formula for hyper-growth, which you can use to transform your business from something impossible to something inevitable.
Over the next ten minutes, accompany us as we look at the seven elements of hyper-growth.
Nail a Niche
How can you tell whether you're ready to advance? There are several hints. You're probably not prepared to develop if you've grown mostly through referrals or word of mouth.
If an inbound or outbound lead generation has been disappointing or you obtain excellent appointments, only a few individuals buy.
You've nailed a niche, on the other hand, if you're regularly able to locate and sign up unconnected consumers or those who have never heard of you before making a purchase. You can expand if you can only acquire ten of them, and they are now paying you profitably.
Because if you have ten, you may obtain a total of twenty. Then you'll be able to acquire 100. According to the writers, your 1,000th client will most likely be just like your tenth.
A niche means you're focusing on a certain type of consumer who has a specific problem. Regardless of how many different kinds of consumers you could assist or how many difficulties you could solve for them.
Focusing on where you have the highest possibility of attracting consumers leads to hypergrowth. Amazon, for example, had a long-term goal of selling everything to everyone, but they started with books.
There are five factors to consider when deciding whether or not a niche is suitable for you.
- First, is there a common complaint? You want to specialize in a certain pain point, but not so precisely that no one else has it.
- Second, you'll want to be able to demonstrate that your discomfort is being alleviated. For example, "increase leads by 217 percent" is a precise and measurable outcome.
- Third, do you have a credible solution? Anyone may claim to deliver results, but will your prospects believe you? They must trust that you can both (a) achieve the results you claim and (b) provide those things for them.
- Fourth, you must have clearly defined objectives. You won't be successful if you can't figure out how to advertise directly to the individuals suffering from the problem you're solving.
- Finally, you must have an uncommon solution to avoid being commoditized.
Create Predictable Pipeline
Creating a reliable pipeline is the single most essential thing you can do to develop your business. You'll struggle if you don't have this.
There are three distinct kinds of leads you can pursue.
Seeds are one-to-many leads derived through word-of-mouth, networks, and personal connections. This is generally achieved by producing satisfied clients who suggest others and stay with you for years.
Some businesses, such as Dropbox and Slack, have spread like wildfire thanks to word-of-mouth marketing.
On the other hand, Seeds will most likely come from systematizing how you keep your clients happy and ensure they obtain value from your service for most businesses. They get more referrals and have lower churn rates as a result.
One-to-many marketing efforts, such as inbound marketing (producing content to attract leads to your firm), are known as nets. Companies like EchoSign, Hubspot, and Marketo have all used this technique to grow their company to $100 million or more.
While there is a wealth of information available on the internet on how to write amazing content, make sure you pay attention to the following points.
Begin with your customer's purchasing steps. Make your material valuable by guiding people through the decision-making process. Breaking things down into three steps is a simple way to think about it.
Early, which focuses on why buyers should be interested in your company. The middle focuses on how to integrate your product or service within their company. Finally, they will choose the perfect seller late in the evening. Here, you should emphasize why you are the best option for them.
Second, the stuff you create must be of excellent quality. This does not imply that your production values must be great, but rather that they must be extremely useful to your target market.
Find out your target audience's pain issues (since they change over time) and develop actionable content for them. The more information you provide, the better.
Third, always, always test. Don't just keep developing material without looking at the outcomes you're getting (or not). More sales are always your ultimate aim, not blog comments, retweets, or Snapchat interaction.
Spears are outbound prospecting or business development initiatives that are specifically targeted. A human is usually engaged, working through a targeted list, phoning, emailing, or using other methods to make contact and schedule appointments.
Outbound marketing is effective when four requirements are met.
- First, you may offer agreements that are substantial enough to be lucrative, generally with a lifetime value of $10,000-$20,000 or more.
- Second, your value offer is simple for a prospect to comprehend and respond to with a yes or no.
- Third, you are distinct from your competitors.
- Fourth, you're not attempting to take over other people's jobs; unseating an incumbent is difficult, if not impossible, in many cases.
For more information on conducting outbound prospecting correctly, see our summary of Predictable Revenue, this book's predecessor.
Make Sales Scalable
It's time to grow your sales staff to take things to another level once you've found your niche and can successfully produce clients. However, it's more difficult than simply employing additional salespeople.
Having your sales staff specialize is one of the most essential things you can do. When you're ready to expand, separate individuals should be in charge of qualifying incoming leads, creating cold outbound leads, completing sales, and account maintenance.
There are several reasons for this, but the most important reason is that each position requires distinct talents to be effective.
Even if you have a salesman who can do all four successfully, the authors discovered that 90 percent of multitasking salespeople perform poorly in all four categories.
Another piece of advice for people who are just starting to build their sales teams is to hire two of them first. If you only hire one person and fail, you won't know why - was it because of them or a flaw in the product?
Similarly, if you employ only one person and they excel, you won't know why. Hiring two people enhances your chances of figuring out why things are working or not.
Those who are already in hyper growth mode should double-check that everything in your sales process is in order.
If your salespeople don't follow a consistent procedure that you know works, you won't develop. You won't be able to hire and train new employees fast enough.
Double Your Deal-size
The writers bring out an unpleasant truth: it's difficult to establish a large company out of little agreements. Small transactions get you started, but it's the larger deals that propel you forward.
If you want to accelerate your growth, keep this guideline in mind. Focus on double your average deal size as much as you work on discovering and closing twice as many transactions.
One approach is to see your product or service as a solution rather than a tool.
Too frequently, businesses establish their product's price based on either (a) what they believe is a "fair" pricing or (b) a "cost-plus" approach.
Instead, think about what value you can provide to your largest and greatest clients, and you can probably start charging a premium.
This, of course, implies that your objective is to grow a huge company. On the backs of business clients who can spend $100,000 plus a shot, it's a lot simpler to get to $100 million in annual recurring revenue and an IPO.
Do the Time
Another unpleasant reality is that no matter where you are right now, getting to where you want to go will take years longer than you wish.
You must accept stress if you want to thrive as an entrepreneur, especially if you're going to expand quickly. Simply getting off the ground will take you roughly 24 months.
According to the writers, you will most likely fail if you do not commit to investing 24 months to gain early traction. You'll also need to devote 100 percent of your attention to your company. But you don't have to work 24 hours a day.
Still, you must commit to compulsively thinking, fretting, and stressing about how you will do the impossible. At night, on weekends, and when you're spending time with your friends and family, you'll be thinking about work.
While the benefits of starting a hypergrowth firm are enormous (wealth, early retirement, world dominance), the process is considerably more difficult than you could ever think. And it never turns out the way you imagined it would.
It is said that the most difficult aspect of entrepreneurship is managing oneself, not the firm.
Ensure this is something you truly want to accomplish.
Embrace Employee Ownership
Once you've decided to do it, it's time to speak about how to build an ownership culture in your company. You won't be able to succeed without it.
Ask yourself this inquiry to see if you have an ownership culture: what would happen if you went on a two-week unplugged vacation? You've got a long way to go if your answer is "total and utter anarchy."
Keep in mind that your workers aren't owners. Therefore they don't act like them. You won't be able to persuade everyone to behave like a business owner.
Presently, your company has four different categories of employees. As you go through these kinds, remember that your goal is to get more "Mini-CEOs" and "Careerists" than "Clockers" and "Complainers."
- The Mini-CEO is number one (High Motivation, High Agitation). This individual is naturally irritated by everything and will seek ways to improve the situation. They're inconvenient to deal with, but they may lead to breakthroughs for you. Give these individuals big tasks to tackle and keep the amount of bureaucracy they have to deal with to a minimum.
- The Careerist (High Motivation, Low Agitation). These folks are content to work their way up the corporate ladder. They are motivated. Therefore, they can manage themselves as long as you engage with them regularly and challenge them when they need it.
- The Clocker is number three (Low Motivation, Low Agitation). These are folks that are simply there for the money. These individuals are necessary for keeping things going but don't expect much more from them. Define work expectations clearly, and don't shy away from having uncomfortable talks about achieving them.
- Complainers (Low Motivation, High Agitation). These folks are brilliant at seeing issues but lack the capacity or motivation to solve them. Make every effort to resolve the problems they raise, but keep in mind that not every complaint or issue requires urgent attention.
To conclude this synopsis, remember that you are in charge of your future. Start right now, even if you're employed by another firm. There is no such thing as a "proper time" to begin working on your ambitions; there is only now.
The first step in creating a hyper-growth company is to take it.
Get down to business!