Startup Growth Tips

In this three-part series, I’ll be sharing my experiences and insights into running a company on lean startup principles.

In my last post (Startup Lessons learnt), we talked about applying lean startup principles in the early stage of your business. This week, we’ll cover the next phase of startup growth.

To recap, lean startup principles are based on the following mantra: Build-Measure-Learn. This means that in every phase of your startup, you’re creating a solution to solve a problem, testing it and applying what you’ve learnt by refining your product further.

This applies to all stages of a startup, but it can be tricky to negotiate the step up from having a market-ready idea to making it work in practice. Here’s my advice for navigating this stage of your startup growth:

Phase Two: You’ve got the engine going, here’s how to keep it running

You’ve got to the next phase of growth in your startup, well done! You’ve done the hard work to prove that your idea is market-ready, now it’s time to start marketing your business and selling your product.

So, you’ve chosen to build a product, so now it’s time to focus on the following:

1. Acquiring New Customers

Sales is relentless work, so accept that to consistently bring in and maintain relationships with customers, you need to keep following up and sourcing new potential clients.

But this doesn’t mean that you need to be meeting clients in person all of the time, because apart from meeting people face to face (which is definitely valuable when possible), there are so many other resources to take advantage of to market yourself and your product.

It’s all about managing your customer acquisition cost. Meeting a client and buying them a coffee before doing your pitch might pay off, but it can also cost you money, when it’s not the only option.

The reality is, you don’t have an infinite amount of capital to fund this, so you need to keep your customer acquisition costs down. Don’t spend like a grown up company.

Be frugal and creative in how you acquire your customers. This can include developing relationships with influential people in your industry and investing in affordable online marketing and social media strategies, which can bring in leads with clear, focused campaigns.

2. Generating Revenue

When it comes to bringing in revenue, keep it simple: act fast, break things, rebuild.

In the beginning, you’ll need to be highly adaptable as customers first start to use your product. There will be hiccoughs. Prepare for these and know that you won’t be able to control everything.

Instead of worrying about things going wrong, focus on being prepared to act fast when they do. Planning for every eventuality will not make it easier.

Sometimes, it’s only when things break that you realise that there’s a new and better way to do something. Use these moments as opportunities to rebuild and refocus.

3. Sustaining Growth

Growth comes quickly so be prepared to do what you need to do to keep up momentum.

Communicate as much as possible to make sure that repeatable process are clear and scaleable, and that everyone is on the same page. Follow up on expectations with your team and clients regularly, and make sure you’re tracking and reporting on key metrics to keep an eye on the overall process.

Sustaining growth means understanding what works, but being aware that this is always going to have to be refined.

4. Becoming Cash Positive: Cutting the Burn

It’s inevitable that you’ll need to spend money to get things going, but in this phase of growth, you need to cut the burn. Be honest about what you really need and cut costs where you can.

For example, at This is Productivity we focus on investing in teams of remote workers. This helps with working in different times zones, and gives flexibility to staff whilst keeping cost of running an office down.

5. Selling your Product, Billing and Collecting your Revenue to Survive

Following up on invoices is hard work, but consistency is key to making sure you can maintain cash flow.

Make sure you communicate your terms, and build processes so that the sale converts into money in the bank as quickly as possible.

Use an accounting system to make sure your invoicing and accounts receivable are configured to help you make the most of your cash-flow e.g. an online accounting system that can send reminders to clients and allow you to track invoices and payments.

6. Seeking Funding to Scale (But Not Waiting For It)

If you’re looking for funding to get going, you might wait a long time.

It’s a lengthy process to get funding, and it takes a lot of work, so make sure you’re not waiting around for it to start your business.

Once you’ve got things off the ground you’ll have something to show investors to get them on board, in order to scale. So really, it’s about being realistic and pessimistic at the same time.

My suggestion is to make this process more manageable by knowing where you stand and what you need by setting clear revenue targets.

What process do you follow/have you followed to generate revenue, manage cash-flow and sustain growth in the early stages of your startup? Share your thoughts in the comments below.

Interested in finding out more? Follow me on Twitter to get updates on the third and final part this series, and all of my upcoming articles.