Most startup founders spend their first couple years in survival mode. Their only focus is to figure out how to keep the company alive to see another day. Unlocking growth is the first and most important step for any startup looking to get out of survival mode and build a real company. But it surprises many entrepreneurs to learn that product-market fit is not enough to unlock long-term growth. After a startup makes its first five to ten sales, they may feel as though they’ve hit a wall that keeps them from progressing further. Bob Tinker, founder of MobileIron and CEO through the company’s IPO, recently teamed up with VC Tae Hea Nahm to interview successful tech CEOs on how they unlocked growth. Together, Bob and Tae Hea wrote the guide to growth for enterprise companies in their new book, Survival to Thrival: Building the Enterprise Startup - Book 1 The Company Journey. One of their key insights: product-market fit is about your first few sales, but that’s not enough. To achieve growth, you need to find Go-to-Market Fit, where you figure out how to repeat a successful sales process. We were lucky enough to have Bob come to a recent Yodlee Incubator bootcamp and speak to our startups about how to get out of survival mode and begin thriving as a company. Bob also talked about the role of the CEO and explained how unlearning is the key to sustaining this growth and building a company that will last.
How to Unlock Growth
Let’s look at three steps all companies must take to unlock growth and build real momentum: 1. Decide what your sales model looks like To unlock growth, your company must pick one sales model. You can experiment with several models to see which model works the best but eventually, you will have to figure out which one works. There is no right or wrong answer when it comes to choosing a sales model. The most important thing to consider is your target market and how your customer prefers to buy. A sales-led model is often the best choice when there are multiple decision-makers involved in the buying process. On the other hand, you can do a lighter touch sales process if the customer decision process is simpler. And if your product is well-known and the buyer and decider are the same person, you may be able to forgo sales reps altogether. 2. Create a repeatable sales playbook This is the hardest part of the three steps but it’s also the most important. You must have a repeatable sales playbook that helps you win new customers. It’s important that everyone on your team contributes and agrees on the sales playbook. The sales playbook outlines the entire customer journey. It describes what sales and marketing do at each stage of the journey and how they continue to nurture the customer relationship. During this step, you also need to discover what the “wow” factor is for your product. This can be challenging because the “wow” factor isn’t usually what you think it will be. Sometimes your customers will get excited about things that are not immediately apparent to you. It’s important to understand the difference between the value proposition and finding the “wow.” The “wow” is what gives your customers a sense of urgency and makes them want to move to the next stage in the playbook. This can change over time as the company changes. 3. You need to create a sense of urgency Once you have found a sales model that works and created your playbook, you need to find a way to create a level of urgency. Why should a customer buy now as opposed to six months from now? Even if you master the first two steps but create no real sense of urgency, you can’t unlock growth. But once you find it, it creates an incredible amount of momentum. Once your startup goes from surviving to unlocking major growth – or as Tinker put it to our class, you go from “how do I keep from dying” to “how do I start winning” – everything starts to shift. The founders can focus on driving growth and can quickly hire and onboard new employees. This growth will bring profound changes to the company and everyone who is part of it.
The Role of the CEO
There are two different aspects of being the CEO of any company: the skills and the mindset that a person must possess. Vision, determination, leadership, and executive are important skills for any CEO to have. These skills get a lot of attention in the media but mindset is more nuanced. When it comes to mindset, there are three important elements:
- Self-awareness: This is one of the most important characteristics any leader can possess. Unless you are willing to honestly look at yourself and your company, you won’t learn anything. This is a very uncomfortable but powerful process.
- The ability to wear several hats: A CEO needs to maintain two distinct personalities simultaneously. One the one hand, you have to be a visionary and have the ability to inspire and lead the company. At the same time, you must be able to anticipate potential problems.
- The ability to close: This doesn’t just refer to signing new customer and closing deals. How will you convince people to get on board with your vision? This could refer to employees, your management team, or a potential investor.
Developing Company Culture
If you are just starting out, then you may not have given company culture a lot of thought. But you can’t overlook this subject because your culture is kind of like the soul of your company. It’s what will unify your team members and guide executives as they make difficult decisions. Most importantly, culture is what will keep your company grounded as you transition into growth. Company culture starts with the founders because they bring the mission of the company to life. You can decide whether you want to choose your company culture or let it evolve organically. Company culture is set once you have 20 people on your team. So, if you want to manage it proactively, you have to start thinking about it in the very beginning. The important thing to keep in mind about company culture is that you must practice what you preach. Your actions should reflect the things you claim to value.
Unlearning: The Key to Future Growth
Life as a startup founder is exciting, but it’s also challenging. There is a lot of work and not enough people to do it. In the beginning, the founders need to wear many hats and do the jobs of multiple people. As the company changes, the role of the founders will change. The strategies that got you to where you are will start to hold you back. This can be a very uncomfortable process for everyone. Many people will be unwilling to grow with their job and you will have to replace those people. As CEO, you must be willing to experience short-term turbulence to find the right long-term solution. The best word to summarize the personal growth during a start-up journey is this: unlearning. What makes a CEO and their team success from A-B, often gets in the way and holds you back going from B-C. As a founder, you must be willing to set aside ego for the mission of the company. The key is figuring out what to keep and what needs to change, including oneself. When your company finds Go-to-Market Fit and growth begins to accelerate, a successful CEO will unlearn the skills of survival and learn the skills of winning. CEOs must constantly learn and unlearn in order to succeed and lead their companies from startup to success. Check out a full video of Bob’s talk here. If you would like to learn more about the Envestnet | Yodlee Incubator, visit our website here. If you’re an entrepreneur with an idea to leverage financial transaction data, applications for Cohort 5 are now open through September 14th, 2018. You can apply here.
