It’s not difficult to believe that you could see companies like SpaceX or Pinterest go from low-value to billion-dollar-capital in a matter of years. Yet as a business advisor I am convinced that making the jump from a startup to a unicorn takes a different mindset, and actions most entrepreneurs are reluctant to face.
Entrepreneurs often fail to get beyond the initial focus of their product or business to scale it globally. This involves organizing an organization to manage thousands of people and keeping their attention “on” the business, rather than “in” the business.
These are my personal experiences with the “second stage” of entrepreneurship.
1. Venture capital is now available to large investors.
While startups tend to think about a million-to-10 million dollars infusions, aspiring unicorns will need financial investments in the hundreds of millions to even billions of dollars. This requires a willingness to sacrifice more equity and take on greater risk.
Then there is the pressure to go public (IPO), and open your investment to thousands, maybe millions, of small investors. This requires you to work hard and take on the risk of meeting the reporting requirements set forth by the SEC.
2. Hire an expert Board of Directors and top-notch leaders.
Friends who are willing to serve on your Board or the founders of your solution will not be able to help you. It’s unlikely you, the founder, will ever survive. My experience shows that less than half the founder entrepreneurs actually want to scale up their businesses.
3. Change your focus to selling instead of product development
A scalable sales process, well-documented incentives and training processes, as well as metrics to track and manage growth are essential for explosive enterprise growth. Customer relationships and the penetration of new markets are essential.
4. Increase internal and external communication
It is no longer possible to be a leader by simply “walking around” talking with all key personnel. It is essential to work with media, including social and traditional press through internal communications as well as public relations. Investors can expect formal documentation about strategy and progress.
5. Shared values can drive productivity and engagement.
It is a challenge for any company that grows rapidly to keep its employees focused and engaged. You can create a culture by defining your values. Then, combine actions with values to help everyone make the right decisions to maximize productivity.
It is a popular strategy to promote a higher purpose to customers and your employees. They will then line up with you, per Yvon Chouinard and Patagonia.
6. For maximum customer focus, separate marketing and sales.
Marketing is responsible for building your brand and managing competitors. Sales are responsible for closing sales and maintaining customer relationships. They are both essential and can be the driving force behind growth as well as survival.
7. To accelerate growth, use mergers and acquisitions.
This is the right time to buy your competition, not just crush them or try to create enough products to take over their businesses. You will need to work with business consultants, do your research internally and integrate outside processes creatively.
Mergers and acquisitions can be difficult, even with proper planning. Overlapping staff, culture clashes, and diverging visions are reasons that nine out of ten fail. They can also be a powerful growth vehicle when they are successful.
Not every entrepreneur needs or wants to build a multi-million dollar business. A smaller business can make many people happier and more fulfilled.
To be the next Elon Musk, Jeff Bezos or other billionaire entrepreneurs, you must take the time to implement the strategies described here. You can make billion-dollar businesses, even though it is not something that happens by default.
Publiated at Wednesday, 4 Aug 2021 9:20:06 +0000