When it comes to building a fast-growth, scalable startup, there are many resources out there that will give you tips and tricks on how to build a community of paying customers fast. For startups, building that community is crucial; after all, a startup is a business that is designed to grow fast. In 2012, Y Combinator cofounder Paul Graham in his essay Startup = Growth describes growth as the single most important feature of a successful startup in his opening paragraph:
A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.
But what is the secret to growth?
One of the most critical exercises to achieving growth in your startup is centred around one thing: customer feedback and the product reiterations that stem from that.
We know that the faster a startup gets to market, the less time it takes to make the first sale, the less time it takes to attract early users, and the faster the company will receive feedback about its platform or service from those paying customers. It is this critical feedback that fosters customer growth and allows a product and company to scale.
However, particularly in Australia, starting a business can be somewhat of a fragmented process – before launching and being able to take your first payments from your customers there are many things that you need to have in order. A registered business, a business bank account, a business name, an online presence, working email, and a system to manage payments and invoices to name a few.
Services like Honcho allow startup founders to save a lot of time and money by acting as a one-stop-shop, aiding users to set up their core business functionalities in an efficient and seamless manner. The service also takes into account that these activities are usually quite expensive, and so has payment options on subscriptions that start from as little as $29.00 per month.
Getting everything set up as quickly as possible in order to launch is crucial. If we look at successful Australian startups that have implemented a ‘feedback-centric’ model a little closer, we can begin to see how connected feedback is to growth. Startups like Stylerunner measure customer feedback across multiple channels, including responding directly to customer remarks and requests, as well as using qualitative data they collect from their website, social channels, and online buying patterns of its users.
This qualitative or categorial feedback has been used by the startup to dictate everything from the way photography for the platform is shot, right through to the colour palettes of buttons and fonts used to communicate with its users on the site. This consistently aids the online business to scale globally and achieve enormous year on year user and revenue growth.
It is the classic Lean Startup approach to building a scalable company.
The Lean Startup Methodology by Eric Ries is based on the principle of getting a product to market in as little time as possible. A core component of Ries’ methodologies is the build-measure-learn feedback loop. In simple terms, this means to start off by entering the market quickly with a minimal viable product (MVP) so that you, as a founder, can begin the education process and learn the answer to a handful of very important questions:
+ Do people want my product?
+ Is this the right go-to-market strategy?
+ Will people pay for this product?
+ Is this product scalable?
+ What features do people actually want?
Speed to market with your MVP means that you receive fast feedback. You are instantly able to work out whether or not your idea is worth pursuing and, if it is, what changes you need to implement so that you have a greater chance of owning the market that you are targeting.
Startups are all about learning quickly and failing fast if the idea is not scalable.
A major reason why entrepreneurs may take so long to pursue their startup ideas is because of the costs associated with hiring professionals such as lawyers and accountants. While these professionals do play an important role a little down the track in a startup journey, data from the Doing Business‘ 2016 Report found that engaging with these types of professionals too early in the piece – the testing phase – has actually been found to ‘bottleneck’ the startup process.
The first step is all about getting to market and collecting feedback. The faster you do that, the quicker your company is in the position for growth.
This post is powered by Honcho. Making it easy for business owners everywhere to be set up for success so they can focus on doing great business and achieving their dreams.