We now have four growth levers to innovate. But what growth limiters should we be careful of?
A Lack of Product-Market-Fit
As sales and marketing leaders, we are often tasked with selling product, but we rarely ask the question “Is this not selling well because we suck at selling, or because we lack product-market fit?”
Imagine a sailing boat. Your product-market fit is the wind 💨 and your business model is the ship ⛵️.
Without wind, it doesn’t matter how many incredibly talented people you have on board or how amazing your ship is… you aren’t moving anywhere.
In the same respect, a strong product-market fit means nothing if you don’t have the right business model to capitalize on it.
Ideally we all want to work in a company where the wind is blowing aggressively and all we have to do is build a ship that can capitalize on that product-market fit. This is the case for companies like slack, gong, and salesforce.
Aggressive investments in growth, despite the absence of product-market fit are devastating for startups and is often the reason for failure.
You can scale up demand, but if you can’t scale up operations you’ll be in trouble. There are typically two things that cause scaling problems.
People: More people creates more complexity. HR and communication issues, team dynamics, managerial challenges.
If you have 1,000,000 customers but they need 10,000 people to support them, it’ll be a challenge. On the other hand, if you have 1,000,000 customers but a strong self-serve product with only 100 staff you can scale up nicely.
Notion only had around 50 employees with an astonishing $40M run rate. Outbound first sales team struggle to scale, simply because increasing lead generation is directly correlated to the number of sales reps you have. In a candidate driven market hiring bottlenecks are a big reason for stunted growth. This is often the reason for building an internal recruitment team early on in scale-ups.
Infrastructure: This can be technology, or physical operations. Amazon has managed to scale despite a heavily manual operation because they invested greatly in R&D to build the most efficient warehouse and logistics supply chain.
Scrappy code can also hinder growth since engineering teams will have to work on re-writing old code infrastructure alongside prioritizing new features, simply to enable scale. Facebook experienced this when they decided to pivot all their energy into adapting facebook for mobile.