While building a startup may seem easier than ever due to the range of tools available, the available metrics about being successful are still not in favor of founders.
In the past year, I have had the privilege of co-founding Sales Kiwi, a virtual sales force and marketing services company, from zero to over $1 million in annual recurring revenue (ARR) and over 25 employees.
What separates the startups that succeed from those that fail? While I don’t have a crystal ball to predict everyone’s future, I have gained a wealth of stories and experience from my work scaling our company. I’m here to share my top five growth lessons, aiming to help you avoid making the same mistakes we made in the beginning.
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1. Focus on a maximum of two growth pillars at the same time
Once we found success on a specific channel, I would follow the same principles with other forms of growth marketing, such as lifecycle, referrals, or affiliates.
My first lesson may seem a bit obvious, but you shouldn’t spread yourself too thin at first. Specifically on the growth front, I never tested more than two paid channels at a time, ultimately unlocking acquisition for my team. This applies to all forms of growth, so if you’re trying to unlock lifecycle marketing, don’t try to unlock four paid channels at the same time. This gave me the ability to optimize and experiment with the channels I was working on right away, instead of throwing everything against the wall and seeing what stuck. Once we found success on a specific channel, I would follow the same principles with other forms of growth marketing, such as lifecycle, referrals, or affiliates.
On the other hand, you also need to make sure that you don’t spend too much time focusing on one channel that isn’t showing viability. A quick back-of-the-envelope method to judge whether you can achieve success on a channel or not is if your customer acquisition cost (CAC) is 5x where it should be, or if you’re only seeing less than 5% of your conversions will come out of the growth pillar after a few weeks of testing. There are a few exceptions to this, such as content or SEO, which tend to have longer timelines before you experience success.
2. Don’t make your reporting too complicated
It’s not easy to have perfect reporting. This is especially true for start-ups. One of the biggest shortcomings at my startup was perfecting our tracking with complex dashboards on our Customer Relationship Management (CRM) software. As we quickly scaled, we kept trying to create new dashboards for the new data points we wanted to measure, which ended up being a big mistake.
These days, I firmly believe that perfection can make or break early-stage startups, and the first $1 million in ARR doesn’t require expensive tools for reporting. Instead, you should use free tools like Google Sheets to create reports for your growth funnel, retention, and other tracking you want to measure. There are also many resources, such as GooDocs, which offer free templates for revenue tracking or project management that can be customized for your startup. There’s no point in spending time reinventing the wheel with fancy frameworks when you can simply download a free template.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.