Editor’s note: This post is adapted from a recent presentation given by Karen Peacock, COO of Intercom — a business messaging tool that enables companies to communicate directly with customers online — at the 2019 Traction Conference in Vancouver.
When you first start a company, you may have a goal in mind. Maybe you want to launch a new product, make $1 million dollars in revenue, or even start new category. If you work hard and have some luck along the way, there’s a decent chance you’ll get there. But once you achieve that initial goal, you’ll probably realize that what you thought was the finish line is actually just the starting point of something much bigger. So how do you keep growing from there? Below are five strategies you can use to drive your next wave of growth to help you go from a $1 million to $500 million business.
1. Expand your market
While your initial customers will always be very important, if you only ever focus on them (or others who look just like them), you’ll be stunting your growth. Instead, you need to figure out how to expand your market and how to get your product to a broader set of customers.
As a company, there are three ways you can typically go about expanding your market. You can start in one vertical and expand to the next, you can start upmarket with a high-end solution and then go downmarket with a cheaper or simpler one, or you can do the opposite and expand up with a product that disrupts the incumbents.
Of course, there are both good and bad ways to reach more customers. If you’re looking to move up market, don’t be tempted to build a custom solution for one big customer. If you do so, and ignore the rest of the market’s needs in the process, the result simply won’t be scaleable. Instead, expand upmarket one step at a time. Find customers that are one step larger than your current product market fit and figure out what it is they need. Then think about how to market to them, sell to them, and set them up for success.
2. Build your next big product
You don’t always need to wrack your brains for your next big product. The truth is it could be right in front of you. That’s because products often wind up getting used differently than how they were originally intended. If you can figure out how your customers are actually using your existing product, new ideas may become apparent.
Watch what they do rather than what they say and create something that works for their needs. The most important question you can ask yourself is what other problems do your customers have and which of those can you solve well?
3. Find your product market fit again and again
For every new market you enter, every new product you create, and every one of your existing products, you need keep re-discovering your product market fit. Think about your favorite products from three years ago. The ones that are still your favorites will be the ones that have reinvented themselves. Simply put, product market fit is a never-ending process, so keep at it.
4. Decide your platform play
Your customers don’t want you to go it alone. They want your products and services to integrate and work well with all the other products and services they use. For that reason, it’s important to figure out your platform play, i.e., which products you want to integrate with and which you want to build on top of. You may even consider becoming a platform yourself.
The principle of successful platforms is focusing on delivering value to your customers first, then your partners, then yourself. You need to start by identifying the key things that your customers want to do with your product that they can’t do today and make that one of your first apps. Then, find the right partners to help you build out the things that your customers need. Your partners want your platform to be easy to work with, so invest in the right developer tools, APIs, and app frameworks.
5. Build your team
These are a lot of things you can’t possibly do on your own or just with your founding team. As you grow, you’ll need to build out that team and you’ll find yourself having to hire for roles you don’t know much about like a head of legal or the person responsible for conversion rate optimization on your website.
Find three people who are considered to be best in class in whatever field you’re looking to make a hire in. You can find them through recommendations, your investors, networking events, friends, and colleagues. Pick their brains and find out more about what they do and what doing a good job looks like. Then pattern match what they would look for, and ask them for referrals.
If you want to assess how good a fit someone is, put them in the job and give them a dry run. When you put them in a job, you will immediately be able to see how they will do at that job, and what it will be like working with them. At the same time they’ll also be able to see if this is a job and a workplace they want to be in.
Don’t give up
Growing a business is a lot of work. But if you use the strategies Karen outlines above, fuelling your next big wave of growth is entirely achievable. And you can use them over and over again until your business is generating that elusive $500 million in revenue.
To learn more, watch Karen’s presentation below: