How do successful businesses grow? If you’re an ambitious entrepreneur, you’ve probably heard the answer to this one. You’ve been told that the most exciting, successful business ideas are all about rapid scale. They can be expanded quickly to reach more customers using the same core platform. By growing fast, they get to dominate a sector, push out the competition and secure the funding they need to grow some more. Being a smart entrepreneur is about getting big as quickly as possible before someone else does.
This blitz-scaling playbook is closely associated with tech businesses, but it’s not the only type of growth that tech should be contributing to. We’ve all heard the standard Silicon Valley growth story. I’m writing this to tell you that there are others — hundreds of thousands of others. As a startup or small business owner, you get to write your own.
If you listen to most podcasts and keynotes targeted at entrepreneurs, you could easily conclude that the sensible strategy is to grow fast or give up, find a formula that multiplies quickly, fail fast if you have to. Growing slowly is seen as struggling.
This just isn’t true. It’s a fallacy that’s exposed by businesses in communities across the world. These businesses spend their time growing sustainably and responsibly by generating value for their communities, customers and colleagues.
The real growth story can be a little slower — and a lot more sustainable.
In 2018, 57% of small businesses in the U.S. succeeded in growing revenue, and the same percentage reported a profit. Contrast that with tech unicorns, the privately owned firms valued at over $ 1 billion that are seen as the ultimate aspiration of the scale-up-fast model. In 2019, the first dozen tech unicorns to go to an initial public offering (IPO) reportedly had cumulative losses between them of $ 47 billion and combined losses in the previous year alone of $ 14 billion.
I grew up watching my parents create small businesses, seeing the passion involved and the degree of trust and reliability needed to earn loyal customers and growth. I learned that small businesses stay closer to their customers. They live and breathe by finding new ways to provide value for them — and this can lead them where larger businesses don’t go. Smaller businesses are the backbone of the economy, not just because they produce most of the gross domestic product (GDP) but because they produce that GDP in ways that businesses obsessed with scale don’t think to. If you’ve ever lived in a small community, you’ll know that it’s smaller businesses that first find a profitable way to serve you. Bigger chains only tend to come in later.
Originally published here.
I’ve always had respect for how smaller businesses are run, which is why I was determined to build my own business, ActiveCampaign, with the same principles. Applying those principles has kept us close and always accessible to small and medium-sized businesses (SMBs). It’s also shown me that you don’t have to lose that connection to your customer in order to grow. We provide accessible automations that help businesses deliver authentic customer experiences across touch points, growing loyalty and advocacy. We’ve grown by doing things different from that scale-at-all-costs tech template, and so have the many businesses we support.
What’s the value of unscalable ideas?
When we started out, we actively tried to come up with unscalable ideas that didn’t necessarily make sense but could work for a while and could help fuel growth through time with customers. We did thousands of free strategy sessions with customers, 45-minute calls that seemed like unprofitable ideas on paper but led to us solving a ton of pain points that we would never have known about otherwise. Those sessions taught us about customers, helped us to shape our platform in a better way and created the customer loyalty and advocacy that’s driven our own growth.
The same story has played out in example after example, like our free migrations and customer success commitment. We see customers finding immense value, becoming advocates, building communities. That’s a far more sustainable way to grow a business than throwing money at paid acquisition. It’s rooted in authentic customer experiences that other businesses won’t be able to replicate. This is why you shouldn’t think about time with the customer as a cost. Think about it as an opportunity.
You might grow a little slower, or you might be less buzzworthy, but you’ll be a lot more sustainable. In fact, you are building something that no one can replicate — a truly defensible and unique experience for your customers. Your competitors won’t be able to just buy or replicate advocacy like this, which is ultimately what makes you successful. You might feel quite a bit happier, too.
Aim for personalization, not over-automation.
It might feel strange for an automation business to talk this way. That’s because we’ve been consistently fed the scale-at-all-costs school of thinking that sees automation as a substitute for contact with customers. It’s not. The way we think about it is automation enables smaller businesses to grow sustainably by providing more opportunities for contact, not less. It enables them to reach more people and give those people value faster. It can help businesses grow without sacrificing the way they’ve always done business.
We believe in personalization, not over-automation.
Technology doesn’t just have to support one type of growth story. It can support many different ones. It shouldn’t dictate how you grow. It’s down to you to write that.