Achieving Hockey Stick Growth with Hanson Li, Ben Lee, and Bonnie Chan Woo

The Founder Learning Series is part of the Gold Rush’s biannual accelerator program. Each week, industry-leading advisors deliver keynote presentations on topics ranging from growth and branding to fundraising and product development. This week’s seminar featured Ben Lee, Managing Director at CircleUp, Hanson Li, founder of Salt Partners Group, and Bonnie Chan Woo, Founder of WOMANBOSS and CEO of Icicle Group.

In this fireside chat, Ben, Hanson, and Bonnie discuss their experience working with brands that have achieved hockey stick growth, covering issues ranging from early indicators of success to strategic positioning for both direct-to-consumer brands and brick-and-mortar establishments.

What are the early indicators of success for hockey stick growth?

It is difficult to diagnose what leads to the sudden acceleration of growth certain brands see when they achieve this success. Rather than focusing on hacking hockey stick growth, Ben, Hanson, and Bonnie agree it’s better to position your business to unlock the highest potential once traction is achieved and move quickly based on feedback from both the customers you serve and retailers you work with.

Ben Lee: Leading indicators for hockey stick growth emerge as a company is about to unleash its potential. Companies can capitalize on these if they recognize the inflection point quickly enough. Leading indicators can include:

• A growing number of people who have an intense relationship with your brand
• Increased buy-in from your retail partners
• Increased engagement on your digital and social channels

Whichever indicator you see your company experience, double-down your investment in that area to maximize your growth potential.

Bonnie Chan Woo: As a founder or startup, you cannot time the market, but constantly iterating on customer feedback will contribute to hockey stick growth. To increase your surface area for success, it’s crucial to focus on community building to leverage word of mouth. Once your community becomes a voice in mainstream culture, your brand becomes very sticky. This can take years, but with some luck can happen in a short, explosive period of time.

How do you overcome a growth plateau and expand?

As you consider expanding your brand, it’s important to consider how you’re maximizing value from your customers. You have to understand your consumer to see where it makes sense for you to expand. Certain brands deliver products and services that allow them to up-sell a single consumer, while other brands focus on acquiring more customers to hack growth. Regardless of which growth strategy will work for your company, you have to start by deeply understanding your consumers.

Hanson Li: For the brands, we have worked with, plateaus are usually an operational problem rather than a marketing problem. You can put more cash into marketing, but if the engagement remains stagnant then the root issue is most likely embedded within your operations. A car can only go so far with a broken wheel, you need to diagnose the operational issue before you scale.

Once you understand where your brand is in terms of interactions with fans and advocates you should be able to understand how you can scale within your existing customer base. However, to get to this point, you need to understand the who, why, and when your customers use your product.

Ben Lee: If you feel like you’ve hit a plateau, you’ve probably taken a marketing or brand position that resonates with a small audience. Paradoxically, many brands fall into the trap of outlining a slew of different features and benefits in an attempt to increase their TAM; in reality, doing so actually shrinks the stickiness of your brand to any audience. You need to focus on understanding the key issue you are solving and making that message very easy to understand.

After you nailed your message and you’re ready to expand from selling into one store, consider whether you need to grow by expanding the number of SKUs in a single store or if you need to enter more stores. The same question applies to your customer base: do you need to acquire more customers or sell more to a single customer? The typical solution is to acquire more customers, but this can vary by company.

When should you go brick and mortar?

Omnichannel is all the rage currently with the percentage of sales from e-commerce increasing about 7% over the last decade. Yet, even so, the vast majority of sales continue to come from brick and mortar. However, an in-person establishment is a large capital investment, so companies must ask themselves when this makes sense.

Bonnie Chan Woo: If going brick and mortar only adds convenience as a proposition of value then it might not make sense for your brand to go brick and mortar. However, if your brand has an immersive physical experience you can always consider trying a pop-up or even multiple pop-ups if you do want to play with the physical element of your brand.

Ben Lee: There is still a very large opportunity in physical retail that can drive a lot of growth for brands, but the key consideration is how you are addressing the needs of your customer. If you provide highly personalized products, this may be more effective DTC rather than through brick and mortar, so the latter would be less of a priority. You need to maximize customer value in any channel you pursue because the bottom line is you grow a business by providing value to consumers. Always ask yourself what is important to your consumers.

Key Takeaways

Rather than asking how you can hack hockey stick growth, it’s important to consider how your company is positioned to maximize your potential growth. Consider the channels you are selling through and determine if those channels are maximizing value for your customers. To grow, you need to serve a product that provides value to your customers and by building a community of satisfied customers you improve your chances of word-of-mouth growth that will enable hockey stick growth.

The Gold Rush Learning Series is part of our 12-week accelerator program. This insight was part of our Fall 2020 program, if you’re a Founder and want to learn more about our program check out this post or visit our website at www.goldhouse.org/goldrush/.

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