How to Build a Growth Plan for Your Startup
Finding growth opportunities for a tech startup is always top of mind. This post lays out some strategies to consider. It is by no means exhaustive, and the relevance of these strategies turns in part on your particular startup. The strategies laid out here likely are more relevant for software startups than hardware startups. They're also aimed at tech startups which have found product market fit, not other entrepreneurial endeavors.
A reliable growth strategy consists of the following sequence of steps:
Define a goal.
Run a test.
Measure the results.
Given the results, consider whether the goal has to be refined or changed.
Iterate based on the results and whether the goal has changed.
Those caveats out of the way, let's get started.
Step 1: Define your goals
Take some time to define your goals. Attach a number to each goal: "I want to grow revenue from our ten largest customers by 50%" is a good goal. "I want to generate more revenue from customers" isn't great because it's not quantifiable. Obviously, generating more revenue from the same set of customers is preferable to generating less revenue from that same set of customers, but the more specific your goals, the better you can track the effectiveness of your growth initiatives.
Let's say your goals are:
Grow revenue from existing customers by 25% next quarter.
Acquire 25 new customers next quarter.
Find five new markets to penetrate next quarter.
These are quantifiable and specific goals, and they have the nice quality of being binary: either you achieve them, or you do not.
Step 2: Run a test
Given a goal, you're testing a hypothesis to realize that goal. Consider the first goal above, "I want to grow revenue from existing customers by 25% next quarter." What test can you run, to try to achieve that goal?
One obvious test is: speak to your 100 largest customers and see where you can upsell them. This overlaps a bit with business development and/or sales, because you're trying to generate additional value from an existing customer. See why they use your service. Tell them about new features they may not be aware of. Determine what their goals are. Get close to your customer.
This isn't a very scalable process, but if your biggest customers are already spending a lot of money with you, they may love your product so much that they're willing to cough up additional cash for other features. Or they may want to buy more licenses from you. You never know. This is a good avenue to pursue, in spite of it being non-scalable, because the return on time invested can be so profitable. You just never know what's going on at your customer. And if they buy a lot from you, they love your product. Can you get them to buy even more of your product? Maybe.
But you'll never know if you don't get close to the customer. This test requires that you hone your sales skills. Not every growth marketer is comfortable talking to customers, but every growth marketer should be. Talking to customers provides invaluable insight into how and why cash comes in the door. If you understand why customers buy from you, as opposed to your competitor, you can unlock critical insights for other growth goals.
Step 3: Measure the results
The proof is in the pudding, as they say. And if you meet or exceed your goals, well, you know that you got results. And that's the benefit of having quantifiable and objective goals. You know that you either met the goal or you did not. You can't know anything if you don't measure what you did.
Step 4: Given the results, consider whether the goal should be changed
Did you fail to achieve your goal? Maybe the goal is too ambitious, or you weren't given sufficient resources to achieve it, or some exogenous and unpredictable variable made the goal impossible to reach.
Reassess the reality on the ground and refine the goal for the next cycle.
Step 5: Iterate based on feedback, and repeat the process from Step 1
This step is fairly simple. If the goal needs to be refined, refine it. Then go to step 1 and repeat the process. If the goal does not need to be refined, then go to step 1 and repeat the process.
Summary
This is a structured and ordered process, yet also an adaptable one. It combines both a logical order to growth strategy, while realizing that startups are volatile and chaotic systems which require constant adjustment.
Finally it's a strategy grounded in data and analysis of that data. You can't have a reliable growth strategy if you don't analyze the data that you get from testing various hypotheses.