Startup Growth Strategy

There is so much excitement in the startup world! I have sat in multiple pitch sessions this month and have spent significant time helping early-stage startup founders with the growth strategy. Having a product is great but how do you bring it to the market? Which market segment do you focus on? And how do you message your product?

So in this month’s newsletter, I focus on how to create a growth strategy for startups. Note that while for enterprises the headers remain the same, the growth strategy would look significantly different.

• Know your Total Addressable Market (TAM) and your potential customer base: Typically, you would have done this work before you started building out your product. However, as you build your product, the feature set, your audience, or direction might change so it is always good to reevaluate the market. Look for trends, compound annual growth rate (CAGR) and geographical split if available.
• Understand your competition and conduct SWOT analysis: While doing so, if you are building a product or a service that is a disruptor and has no direct competitor, I recommend that you consider tangential competitors. How do your potential customers address their pain points currently? That will help you formulate your marketing strategy.
• Define your goals and measurement criteria: Define what growth means for your startup – Is it customer adoption or bookings or revenue or NPS or a combination of any of these. It is important to know that the measurement criteria for growth will be different at different stages. For example, if you are working on your MVP and the product is not out in the market, the criteria might be potential customer awareness which can be measured by waitlist that you build for your MVP. However, when you release your product, the criteria might change to bookings or customer adoption. Bottomline: Immaterial of where you are in your startup journey, you should always define your goals and have measurement criteria defined.
• Align your investors on the goals: Whether you have preseed money from family or friends or you have investors backing your startup, you need to make sure that they are aligned with how you define growth and the measurement criteria. I coached a founder a few weeks ago to develop a 5-year growth plan for their investors who had asked for a CAGR that was unreasonable. We considered the rate at which the market was growing and what we would need to do both from an organic and inorganic growth perspective to get to the CAGR that the investors expected. When the investors saw that analysis, it was clear to them that they had to align their expectations with reality. We were able to get a buy in on how growth should be measured every year. So, my advice is to not just agree on the numbers that your investors throw at you. Have a dialog. Model out the scenarios and present a case to align on goals.
• Define your Go-To-Market plan: In startups, we are so busy building the product and getting the MVP done, that the GTM plan is almost an afterthought. It starts late in the cycle and is often focused on the launch. However, the GTM motion needs to start way before the product launch and needs to consider messaging, marketing, sales, enablement and support motion. Your product can be great but if the messaging doesn’t reach and resonate with the customers, there will be no adoption.
• Keep it lean and agile: As an early-stage startup, you will make a lot of assumptions around Serviceable Addressable Market (SAM), pricing, ideal customer persona and others. Build a strategy that is lean and agile to accommodate for the shifts in market and these assumptions.

Building a growth strategy is exciting. It is often times eye-opening when you start putting the numbers together and can lead to crucial conversations around customer base, pricing and packaging and product direction.

Do you have a growth strategy for your startup? I would love to hear your experiences.

Your comments, shares, likes, and messages provide me motivation to keep bringing these insights to you.

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Resources:

·?????A 30-minute free call with me to help you design a growth or GTM strategy for your startup

·?????eWOW Startup ThinkTank

·?????Startup Idea? What Investors Look For in Startup Founders?

·?????Startup Idea? Do you need a Co-founder?

·?????Startup Idea? When to Market?