All #AskJason: Building a Business in 2016? Here’s What You Need to Know About Growth
In episode 612 of This Week in Startups, it’s #AskJason time. Jason sat down to answer 14 questions, on topics such as scaling, hiring, pitching, and more. Many questions focused on the topic of growth, and Jason shared plenty of wisdom on the topic. If you’re starting a business, looking for investors, or still in the ideation stage in 2016, growth should be in the front of your mind. Read on to find out why.
Growth is only thing you can control as an entrepreneur.
“Focus on what’s in your control, which is the growth around your startup.”
You can have great ideas, build talented teams, and pitch investors like crazy, but at the end of the day, growth is the only thing you can (and should) be focused on: defining the growth story of a company is the job of an entrepreneur. You can’t make investors give you money, but you can learn about your market and improve your product to encourage growth. It’s all about focusing your energy on the parts of the business you can control. Speaking of investors…
Growth is the one thing you have to prove to investors.
“It’s up to us as entrepreneurs to prove that we have the traction needed in order to get the investor’s money.”
If you can’t prove definitive growth, month over month, it will be hard to convince investors to pay attention: after all, they’re putting money on the line and want to know that the past growth you’ve displayed is likely to continue. If you don’t have the past growth, how can they be sure you’ll have future growth? If you don’t have growth, or aren’t sure if it’s evident to potential investors, Jason recommends doing additional market research and seeking feedback from investors after you meet.
Great growth (and bad tech) will beat out great tech (and bad growth) any day.
“Great technology and no growth? No money, no employees, nobody wants to be involved in your business.”
It’s sad, but true: a stunning, beautiful, multi-featured product with no users is never going to win investment funds. As mentioned above, focusing your energy on growth should be the number one priority, not perfecting a technology nobody is using or wants to use. It’s better to be “collapsing under the weight of your own growth,” as Jason say, and raise venture capital to fix all the bandaids on your technology, than to perfect a product to the sound of crickets chirping.
It’s not about growth versus revenue. It’s about growth and revenue.
“In 2016, you want to have both switches flipped on.”
A few years ago, growth was enough to build your business and droves of investors were handing money to un-monetized products without worrying about when monetization would happen. This is a new year, and the trend from 2015 which saw a decrease in this kind of behavior will continue: investors want growth, but they also want evidence on if/how monetization works for your company. If you can flip both switches for growth and revenue, you gather valuable data that gives you credibility with investors.
Hear all of Jason’s answers to your burning questions, as well as past episodes, on This Week in Startups.
01:29–04:06: How do I sell my idea to a successful startup?
04:14–07:31: My startup has traction but no investors. Is the problem pitch or product?
07:35–09:28: After a startup’s distribution plan, what is most important to you as an investor?
11:59–15:03: How do you judge startups in fields where you have no expertise?
15:04–17:39: In launching MVP, better to focus on # of users or revenue stream?
17:41–19:23: Where are the opportunities to innovate with government?
19:26–22:18: What business processes have been surprisingly valuable for you?
25:05–30:36: What are the top 5 things to consider in pitching to investors & funding?
30:40–35:36: Would you hire someone with a felony conviction?
35:37–37:31: How do consulting service providers scale up?
37:32– 40:41: Which will have bigger impact on VC market: AngelList $400m fund or YC Continuity Fund?
40:44–42:34: Does scaling & growth matter more than tech?
42:35–47:53: What are big video trends shaking up market, and how to take advantage?
47:54–51:10: How do you raise for “new” tech requiring a multidisciplinary team?
— Valerie Stimac, TWiST archivist
Valerie Stimac is a Seattle-based marketer and writer with a background in the tech startup scene; she started at one of Paul Allen’s startups back in 2013, and has since contributed it both consulting and full-time roles for other startups in Seattle and remotely. Valerie has also contributed to travel publications including Yahoo Travel and Lonely Planet.