A Simple Business Growth Model
Whether you’re building or growing a new startup, or creating a new division within a larger company, or growing your company, aligning all the key elements to create a successful and scalable business requires careful planning. Pulling from my 20+ years as CEO, I have put together A SIMPLE BUSINESS GROWTH MODEL that can help guide you as you grow your company and may be act as a check list to identifying weaker areas.
It is important to be deadly honest with yourself as you assess what you already have, where you are weaker, and what you’re missing to build a highly successful company. You may refer to the graph which starts at the bottom as I take you through each building block and level.
Level 1 – START WITH A WINNING PRODUCT
Often, entrepreneurs or inventors are over-excited about their ideas. While having a good product means you are in the game, it doesn’t mean you will win the game. In fact, I often remind entrepreneurs that what they need to build is not a product but rather a successful business. On level 1 as it relates to product, here are 4 key aspects the product should have:
- Deliver tangible value to users
- Is distinctive enough in the marketplace (distinctive positioning can play a role here)
- Is scalable
- Has a strong enough revenue growth potential
If the product does not have these 4 aspects, consider tweaking the product, re-inventing it, or exploiting a totally different and new opportunity!!! Too many times, the natural behavior is to go ahead full force with at best, an average product.
Level 2 – 2 MISSION CRITICAL EXPERTISE REQUIRED
At the early stage of a startup, you need two amazing key people: a product expert and a strategy expert. The chief product officer needs to have a deep understanding of what the customers want, where are the current “need gaps” and for which market will the product be suited.
Knowing the product inside and out is critical but driving forward the product road map based on the customer’s needs is even more crucial. Testing, tweaking, and having an agile dev process to respond to evolving customer needs and feedback are key to the effectiveness of your product development strategy.
As importantly, you need a strategist that can take the idea or product and create an orchestrated business plan that will translate into reality, raise money, and generate real and scalable revenue.
Level 3 – DEFINE THE STRATEGY & POSITIONING
Here, the strategist articulates the details of the strategy and the positioning for the company in order to raise money and scale revenue and the company. He or she gives a clear direction for the business that is directly based on research and the real needs of prospective customers.
That person creates the financial and revenue model for the company, establishes the key metrics for success, and establishes testing plans to validate all assumptions of the business model. The 3 key parts of the business plan are:
- Defining the brand, the unique value proposition and the target market and positioning
- Defining all the sub-strategies for each parts of the business
- Establishing key performance indicators or metrics