How can we take what we have and make it grow?
It seems like a simple enough question. But growth is hard -- especially in the corporate world.
Between increased competition, shorter cycle times, and growth hackers finding innovative ways to disrupt a market in record time, scaling your business has become increasingly challenging (and more imperative than ever before).
But before we delve in further, let’s not deceive ourselves: There is no secret formula to growth. There are no magical fives steps to take us from point A to point B. There is no checklist or formula. That era is gone (if it ever existed).
Growth is an outcome of hundreds or thousands of working parts. It's a result of thousands of explicit and implicit decisions made by crowds of people within and beyond your organization, each and every day.
And while there are no secrets to instantly unlock or guarantee growth, there are lessons to learn by observing growth companies. With that said, my hope is that the wisdom and observations below will help propel your organization on a better growth trajectory than you were on yesterday.
3 Business Lessons From High-Growth Companies
Have you tuned into The Growth Show yet?
This podcast from HubSpot -- hosted by CMO Mike Volpe -- is full of compelling conversations with leaders from high-growth organizations. By tapping into the processes and inner workings of these organizations and the individuals that power them, Volpe uncovers valuable takeaways for businesses both big and small. Below we've identified three noteworthy lessons from his conversations with three impressive organizations.
When Zendesk CMO Bill Macaitis left his growing SaaS company to join a startup called Slack, he marveled at how maniacally focused Slack was on their customers. (For perspective, Zendesk helps organizations provide world-class customer service, and is often lauded for its expertise in creating great experiences for their customers, and allowing their customers to do the same.)
If you are unaware, Slack is one of the fastest growing enterprise software company of all time. In less than nine months, it went from launch to a valuation over $1 billion. Less than 2 years after its founding, it is now approaching a $3 billion valuation, with ARR (Annual Recurring Revenue) growing by $1 million every 11 days and user growth growing 8% weekly.
But, what is Slack?
Slack is an internal collaboration and communication tool. In his conversation with Volpe, Macaitis likened the tool to Uber. In the same way that Uber improved the experience of finding and riding in a taxi, Slack has set out to transform the painful experience of enterprise communication and collaboration.
Slack built their revenue model primarily around usage, which is commonly risky for an enterprise SaaS company. Most enterprise SaaS companies charge per user per month, whether their customers use the software or not. However, by focusing on this metric as its primary measure of value, Slack forces itself to continually make the product more useful and more engaging for its user base. If people aren’t using it, Slack isn’t making money.
In another move counter to traditional thinking, most organizations would jump at the chance to onboard new large accounts. Macaitis recounted being courted by multiple companies who wanted to deploy 10,000+ seat installations that Slack decided to decline early on. How many companies would have the guts to do that? It was too early, and they simply couldn’t risk disappointing that many users. They waited until they were confident that the users would be delighted and willing to recommend Slack to their peers and friends.
Another key fundamental observation is that Macaitis views branding not as a marketing exercise but a result of interactions with every single touchpoint. Engineering, support, and customer service are all ambassadors of the brand, not just those who are considered marketers. This viewpoint -- embedded into Slack’s culture -- has a profound effect on its internal priorities, communication, activities, and culture. As mentioned earlier, they are maniacally focused on the customer ... and it’s obviously resonating.
Shopify powers thousands of ecommerce storefronts. And while the growth has not been quite as dramatic as Slack’s, Shopify still easily qualifies as a high-growth company. When CMO Craig Miller joined Shopify, they had 13,000 customers. Three years later, they had 130,000. For those keeping score at home, that’s 10X (1,000%) growth in just 36 months.
One of the most interesting highlights from the conversation with Miller was him stressing the point that everyone is responsible for marketing, and that anyone can bring in a customer. This is vastly different from most organizations where marketing and sales are exclusively responsible for customer acquisition.
When Miller arrived, Shopify had a strong technical culture with little respect for marketing. He built the marketing team from scratch and soon renamed marketing the “growth team” in order to clarify what they were all there for.
However, instead of just focusing on growth within their group, the growth team’s main focus was to create a culture of growth and customer acquisition throughout the entire company. The transition and collaboration across silos wasn’t easy at first. However, by creating value through little small wins for other departments, the growth team earned trust and began to gain more respect and influence throughout the organization.
Experience and brand are also a reflection of the evolving culture at Shopify. In the digital world, it takes something special to differentiate. Along with a great product, Shopify is often lauded for its "Terms of Service" page of all things. By infusing a bit of humor and personality into the most boring part of its website, the company garnered attention and created a more human bond with customers and prospects. Additionally, when customers sign in, they are met with a greeting of “Good morning, good afternoon, or good evening.”
“You’re doing something anyway. Just make it a little bit interesting, make it a little fun. It really doesn’t take that much effort to do something a little more remarkable,” according to MIller.
3) Tough Mudder
In case you were thinking that all high-growth companies come from the world of high tech, think again.
When Will Dean was an MBA student, he was racing in a triathlon. While he was changing out of his wetsuit to begin the next section of the race, his zipper got stuck. He asked several fellow competitors to help, and was shocked that no one would.
He thought that there should be a better way for people to work together to conquer obstacles and achieve goals. When he ran the idea of what would ultimately become the Tough Mudder by his business school professors, they all thought it was a terrible idea. But, he went with it anyway. His focus wasn’t necessarily on profits, but rather making the world a better place.
He launched his first event in 2010, hoping that 500 people would show up ... 5,000 people showed up (and they payed between $70-80 to be there). A business was born.
Fast forward five years, and Tough Mudder now has more than 70 events annually around the world, and it has been so impactful on people’s lives, it is estimated that more than 5,000 people have Tough Mudder tattoos.
One key differentiator for Tough Mudder is that they view themselves as being in the “self esteem business." People are ultimately paying money to feel good about themselves and to conquer new obstacles alongside a team.
Dean talked about the virtuous cycle of creating a great and unique experience, which attracts the best people, which in turn, allows them to continually create the best experiences (which attracts the best people and so on). This cycle results in incredible brand advocacy and thousands of resumes for each available job opening around the world. A cross-functional team that he likened to Disney’s Imagineers are constantly trying to cook up the next mind blowing experience for the race course.
According to Dean, “If you’re not growing, you’re dying."
So, what can we learn from these growth companies? While each story has its own uniqueness, a few common threads emerged:
It's all about the experience.
In each story, there was a deep understanding of a very specific need coupled with a driving passion to make the customer’s experience remarkable. These organizations have structured their culture, operations, and incentives around creating a great experience for their customers, not just as a side note to their core business.
In doing so, both Slack and Shopify have democratized the responsibility of growth, experience, and branding to everyone in the organization. This helps to ensure that each and every touchpoint shapes the customer’s emotions and experience, which ultimately aims to influence how much they spend in the future.
Great people are essential.
The greatest assets of any organization are its people. As the pace of change increases, finding people who are talented and can adapt to change with a strong work ethic, high integrity, and the ability to learn and solve new problems is the key.
At the end of the day, being remarkable attracts the best people, and having the best people allows you to do remarkable things.
A culture of innovation is necessary.
In each of the conversations above, there was something special and unique about how each company was approaching their respective markets. They’re not locked into traditional roles divisions, business models, or metrics, but are investing new ways to create value for their customers, faster. But rather, they are relentless about creating something that’s awesome, unique, and that others can’t duplicate.
Slack is trying to remove pain associated with communicating and collaborating by holding themselves accountable to make enterprise technology that people actually want to use (and staking the financial success of their company to it). Tough Mudder is tapping deeply into human desires of feeling good and belonging to a community, while continuing to invest heavily in raising the experience bar for those who participate in their events. And Shopify is making growth the responsibility of everyone, not just people who are traditionally in customer focused roles.
Regardless of your industry, these high-growth organizations provide examples of how businesses are leveraging creativity and passion to create significant value for their customers.
How will you leverage these observations and apply them to your growth efforts? Let us know in the comment section below.