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Startup growth tips from 10 founders

Looking to grow your startup? This blog provides practical tips for you to implement in your business.

Looking to grow your startup? This blog provides practical tips for you to implement in your business.

The last few years have been challenging for startups. With difficult market conditions, economies on lockdown and supply chain issues all having an impact on the growth plans of most budding businesses.

There have been some notable exceptions though. The tech sector in particular has boomed and has been a driving force in economic recovery. Venture capital provided a welcome source of dynamic and flexible funding during the pandemic, with fundraising reaching new heights.

Given that startups are built upon innovation, efficiency and problem solving, they were well placed to react to new market norms and use investment wisely to leverage the opportunities the pandemic offered. With growth the priority of all startups, having an exit in mind is good practice early on, especially if the goal is to go for an IPO. We will cover the IPO definition below, before we consider the growth tips from ten founders across a range of industries.

IPO definition

What is an IPO?

An IPO is an initial public offering. This is where shares in a private company are offered to the public in a new issuance of stock. Before undergoing the IPO, a company is considered to be private. Shareholders in private companies might include the founders, family and friends, venture capitalists and any other early investors.

Committing to an IPO is a big step for a private startup to make. In the long run, it can allow a startup to access a lot of new capital, but there also comes with it regulation and transparency requirements that public companies must abide by (it’s the law). The credibility that a public listing provides can help with things like negotiating terms of new funding, which can make raising capital less expensive.

Typically, an IPO happens when a company has achieved significant growth and has a high enough valuation. Valuation isn’t the only feature to consider during preparedness for an IPO, having a proven track record of profitability and possessing strong fundamental KPIs are also important qualifiers.

What is the IPO share price? The shares in the private startup are priced based on underwriting which is typically performed by a major investment bank. The investment bank then tries to sell a proportion of the new shares to institutional investors within its investment network. The remaining shares are offered up for public sale.

Once a company has ‘gone public’, the previously held private shares are converted to public shares, and their value becomes the trading price.

During this time the original private shareholders may sell some or all of their shares, which realises their profits. Alternatively, they may continue to hold them in hope of further gains.

Growth tips from 10 founders

Now we know where growth leads for the majority of startups, we can look at some growth tips to help startups of all sizes maximise efficiency during their growth cycle.

  1. Customers make it happen

Randy Baker of Thought Leader Path advises prioritising existing customer networks. The retention of a customer within a startup’s existing customer base is at least 5 times less expensive than acquiring a new one. He also says that increasing retention rates by 5% can drive profitability by over 25%.

Randy recognises the need to offer value add products and services to existing networks to boost retention and achieve rapid growth. Upselling and understanding current customers can be a strong driver of growth. Having strong relationships with customers is a good place to start, allowing friction points to be removed and key products and services to be improved. When customer relationships are strong, premium versions of products and services have a greater chance of selling.

2.Partner with the right people

Who a startup partners with will define its future direction. Partnership decisions are vital to ensure that funding is sourced from people who share the vision of the company and can help it realise its growth journey. Relationships with partners and new members of a startup’s management team, will drive future success, or failure. As challenges and opportunities arise, partnerships need to be aligned in order to ensure the startup can react to difficulties and scale when the chance arrives. Jake Loosariarian of Geko Robotiks says that the “success of Geko is not two people. It’s a bunch of extremely talented people working together”. This is a powerful insight into the value of partnerships and their ability to leverage opportunity.

3. Assemble the right team

Startup growth plans start and end with having the right team in place. Think of it like building a house, if there’s no solid foundation, the structure will always be weak. Growth that’s driven by poor leaders will always be subject to outside threats and challenges.

When you put in place the correct leadership and senior team, there will be enough experience, expertise and intuition to navigate the path to an IPO and emerge as successful. Strong leadership inspires a hardworking and dedicated workforce. This helps equip a startup for continued growth and allows resources to be efficiently focussed on meeting business goals. "Hiring the absolute best people you can is a surefire way to ensure fast growth," Christian Lanng, CEO and co founder of Tradeshift.

Need help focusing on growth?

Tom Putnam, who founded Beeline with good friend and co-founder Mark Jenner in 2015, talks to us about his journey and the trajectory his firm is on. Listen to this School of Startups podcast, for an original account of one founder’s lived experience during rapid growth of an exciting London based tech startup.

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4. Reduce risks

Risk is ever present to all startups. This is especially so when startups are prioritising growth, as this means taking risks and making decisions in order to scale. Whilst it’s not possible to be in control of everything, there are many ways to mitigate internal and external risks.

"Small businesses need to manage their growth to avert disruptions that can bring business to a grinding halt," Mike DeHetre, from Travelers. During growth, it can be easy to lose focus on the less exciting aspects of the business, but actually if this happens then the growth itself is under threat. Ensuring that elements of the business such as cyber security, continue to be maintained and reviewed is vital to be successful.

5. Become comfortable being uncomfortable

Aaron O’Hearn of Startup Institute says “you will never know enough”. During startup growth there will always be situations where business leaders need to make a decision regarding circumstances they don’t fully understand. This is the nature of the startup world.

By becoming comfortable knowing that this will happen, and that it’s normal across all startups, leaders can be better placed to ride-out problems and avoid being paralysed by lack of a clear and obvious direction. By accepting that not everything can be known and controlled all the time, leaders can discuss and plan for a ‘good enough’ response that utilises the experience and resources that the startup can call upon.

6. Know when to let it go

Founders that are searching for growth can be guilty of allowing parts of the startup to become personal. When a growth focus is something tangible such as an IPO, a driven and motivated founder can become obsessive about achieving that goal.

Obsession can be a valuable trait in a founder and many startups have gone public after being carried there off the back of talented and driven founders. Pavia Rosati of Fathom however, warns against becoming too close to the action. When founders get so involved that it becomes impossible to be objective about evaluating products and services, or decision making is stifled, it might be time to take a step back. Nothing can jeopardise growth like a founder that can’t make decisions or accept feedback.

7. Ignore the hype

Jules Pieri co-founder of The Grommet warns about listening to the noise surrounding other startups. The risk of losing focus due to distractions surrounding competitors is real. Intrinsic growth can be threatened by looking at the priorities of other startups and then responding to them. Jules says, “it’s usually a pack of lies and half of them will be dead in a year”.

8. Be trustable

Brian Chesky of Airbnb values being honest and compassionate within the business. He advises that if you’re perceived as not being transparent then stakeholders can lose trust, resulting in an unacceptable risk to the growth of a startup. Brian’s tip to maximise growth is to engage with stakeholders in a way that’s compassionate and authentic.

Trust, in a corporate sense, is a powerful way to engage all personal connections with a startup, from customers to investors.

9. Are you a good cultural fit?

A culture within a startup can only be effective if it is embodied by the management team leading it. Founders should be visible participants in a startup culture and set an example for more junior colleagues. Ben Horowitz, co founder of Andreessen Horowitz, is a champion of strong positive cultures driving growth in startups. He describes culture as a “set of assumptions employees use to resolve the problems they face every day. It’s how they behave when no one is looking.”

10. Strike a balance

Jamyn Edic, founder of Dash Lab is a proponent of finding balance when undertaking a growth journey. In this sense, it’s balance in terms of all aspects of a growth plan. For example, when conducting customer research, it should be detailed and comprehensive, but you should also trust your instincts.

Following this advice can stop elements of the business plan becoming bogged down in detail or frozen by lack of decision making. Tackling everything through a balanced perspective can allow founders to move past friction points by accepting that things can’t always be perfect, and other facets of the growth journey are equally important and deserve attention too.

In summary

Growth is always going to be a challenging process. Good planning, strong leadership and a startup culture that inspires and motivates can all help startups navigate the path to an IPO. The growth trajectory followed by any startup will be individual, and no identical comparable will exist in the market to help.

Founders need to be flexible and adaptable in order to focus on their journey whilst cutting out the background noise that surrounds growth. As we’ve mentioned, growth is about taking risks, but not allowing circumstances to become a threat to the business. Mitigation and monitoring are valuable uses of resource for any startup embarking on a growth journey. Finding the balance between making bold moves to scale the business and ensuring the foundation of the startup remains steadfast, is the key to success.

Startups that have a growth plan that leads to an exit via IPO will face difficulties. There will be unknown problems, market challenges and threats from competitors that founders couldn’t have envisaged when the growth plan was constructed. However, professional advisors can assist with this process. Having access to experienced and talented advisors can provide a compelling temporary addition to your team, allowing you to move past friction points.

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Achieving an exit for your start-up can be a tough process. As your startup begins the exciting journey towards growth it’s important to make the right strategic decisions (and get the right support).

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If your company is looking to take advantage of market conditions and go public, we’re here to help. At Accountancy Cloud we offer a smart, live and personalised finance team to work alongside your business. We give founders the freedom to focus on what they love and make smarter decisions by using our market leading smart software and industry experts.

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Through our motivated and personalised service, we can help you achieve all of your business goals. Talk to us today to see how we can help you.

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