How the Fastest Growing Companies Are Built for Success
How would you like to be at the helm of one of the fastest growing companies in the world?
Today, let's learn from some of the fastest growing, super-growth companies and apply some of their strategies and techniques to our businesses where we can.
Want to listen? There's an audio version below
After doing my research and writing most of the content for this post, I realized something fairly important. And I want to note it here because it's worth mentioning, even if it doesn't fit into one of the twenty major strategies I've outlined.
Fast-growing companies take risks. Not just small ones; major ones that don't always lead to immediate positive results. For example, when Amazon decided to create their own line of products, their stock dropped by over 50% in 3 months. When Netflix announced their spin-off company Qwikster, their stock fell over 75%. But both companies tried something, learned, and ultimately succeeded.
In short, I don't think you can win big if you don't take calculated risks.
How the Fastest Growing Companies Build for Success
By the way, we'll cover the first 10 (out of a list of 20) in this post. The second half will be exclusive to March 2018's issue of Catalyst Monthly.
1: A Better Business Model
Companies with stagnant growth are plagued by inconvenience and complexity, and they're losing in the marketplace. Just look at how Uber and Lyft have crushed cab companies and their traditional business model. Netflix created a new, convenient and simple way to watch movies that changed the entertainment industry.
In February's issue of Catalyst Monthly, I wrote about how to simplify your business and streamline sales. Fast growth companies do both. Sometimes what worked yesterday won't work today, and fast growth companies are able to capitalize on shifting trends in the market.
A growth-minded business model reduces complexity and inconvenience.
2: A Big Mission Clearly Defined
During the first quarter of the year, my mastermind and coaching clients often discuss their goals. Specifically, their massive goals that seem impossible and what they're going to do to achieve them.
But the fastest growing companies have big goals that are clearly defined. When you have a clearly defined target, you always know what you're working toward, and you can measure your actions against whether or not they'll help you achieve that goal. Every new product, every piece of media content, and every decision can be calculated as either positive or negative on how it will or won't help you hit your goal.
As the saying goes, if you don't know what you're shooting at you'll hit it every time. The fastest growing companies have big, clearly defined missions that are front and center.
3: Communication & Conversation
In the second half of 2017, chatbots were a HOT topic in the world of online marketing. While getting a Facebook message 30 seconds after you abandon your shopping cart might be super-annoying… ok, ya, it's just super annoying… the goal of chatbots is to start a conversation.
Try chatting with me!
While chatbots can be annoying, the fastest growing companies have discovered that communication is key, and conversations are the cornerstone of commerce. Buyers want to ask questions before they buy. As I've always coached my clients, when people have questions they're confused, and confused people don't buy.
The fastest growing companies make it easy for their customers to communicate and converse with them.
4: Don't Rely Too Much on Amazon
My friend Marshall Stevenson is the owner of Sock Box, a subscription sock company in Canada. And he's crushing it. His business has grown significantly since he started it in 2014.
One of the options available to Sock Box subscribers is the opportunity to include a handwritten note along with the socks if you're sending them to a friend or loved one. When I asked, Marshall told me “I've personally written well over 10,000 cards.”
Amazon is a distribution channel, it is not your business. As with putting all of your marketing eggs in the Facebook basket, you don't want to put your business in the hands of someone who A) isn't you, and B) can crush you with a single algorithm change. Or C) who can create a competing product quickly (see #6).
You can differentiate your business from what the major players are doing by sending handwritten cards like SockBox, personally calling new clients, or recording personalized videos for people who sign up for one of your programs. While I'm all for automation and scalable systems, doing the things (like calling new subscribers) that don't scale is a great way to stand out.
NOTE: In the March issue of Catalyst Monthly I'll talk more about some of the things I do in my coaching business that don't scale but make a great impression.
5: Start Niched, Grow Broad
If you try to speak to everyone you'll end up connecting with no one. A generic message never makes a memorable, lasting impact.
Consider the growth of GoPro. In 2002, they started out extremely niched as a camera surfers could use to record their tricks and antics. Now they're the #1 camera for all action sports and the company is valued in the billions. But had Nick Woodman, GoPro's founder, started by creating yet another camera with a fish eye lens, he'd have likely failed.
And as a side note, even to this day new HERO cameras come with surf-related menu and navigation titles, bringing GoPro's surfer roots to every device they make.
Companies with the fastest growth start with a small subsection of an industry as their target market. Only after they dominate that niche do the expand and grow broad.
6: They Create & Sell Their Own Products
You can't become a major business if you're entirely dependent upon the whims of someone else. If you want to experience massive, accelerated growth, you must create and sell your own products. You have to have control over the development of the product as well as the distribution of it.
For example, for the first 15 or so years Amazon was around, they were simply a marketplace for other people's products. Then, in 2009, Bezos and co. launched AmazonBasics.
The prevalence of AmazonBasics products hit me the other day when I went to browse the selection on Prime Now. I was amazed (and kinda shocked) to see that there were over 6 pages of AmazonBasics products!
I suspect that the slight dip (in the graph above) right before the explosion of growth was when Amazon announced they were going to begin manufacturing their own products. And it appears the gamble paid off because now AmazonBasics makes almost 1500 different products from batteries to bedding and even office chairs. And Amazon is the most valuable retailer in the US and is the fourth most valuable public company in the world. You can find all of the AmazonBasics products here (the list is pretty impressive).
Fun fact: Bezos initially incorporated his company with the name Cadabra, Inc., but ended up changing the name to Amazon.com, Inc. a few months later, after a lawyer misheard its original name as “cadaver.” (Source)
If you want to experience growth like the fastest companies, don't just resell the products of other companies, and don't settle for just being an affiliate. Create your own products so you can have higher profit margins, maintain quality control, and so you don't have to rely on a third-party to serve your customers.
For further proof, here's a look at the growth of Netflix after they decided to start creating their own original content:
7: Personalization & Segmentation
When Walmart began spreading like wildfire and built stores in every town across America, small businesses and “mom and pop shops” cried foul and claimed that the big retailer was putting the little guy out of business every time a new Walmart came to town.
But here we are, a couple of decades later, and small businesses are thriving (mine included). And they're doing it through personalization.
Competition drives innovation, and when big companies move in, they don't push out the little guys, they just change the playing field.
If you can pivot your business processes, there is a massive opportunity around personalization and customization. You can create a bland headboard like everyone else and sell it for cheap, or you can hand carve a work of art and sell it for 10x as much. A race to the lowest price is NOT a race you want to win anyway.
Then comes segmentation. The fastest growing companies have figured out a way to deliver these personalized experiences and products by tracking behavior and grouping their customers according to similar interests.
Why send dog coupons if you know your customer has cats?
Why offer a coupon for a product to someone who just purchased it?
My magical tool for segmentation is ActiveCampaign. With their site tracking code, I can see the pages people view on my website and tag them according to their interests. Combine that information with a yearly customer survey and I have a powerful tool for segmentation that I can use to send out targeted emails to warm leads. And I show people how to do that in my training course 8 Weeks to Exit.
8: User-Generated Content & Social Engagement
Without user-generated content, the odds are, you and I never would've heard of GoPro. Each year, extreme sports enthusiasts and casual travelers alike give GoPro millions of dollars worth of free material the company then uses for marketing and advertising. And that user-generated content has helped GoPro grow into a company worth over a billion dollars.
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9: They Advertise
Fast growth companies aggressively go after their clients. They stay in front of potential buyers by placing ads in the Facebook news feeds, they buy keywords through search engine marketing, and they try to earn mindshare – not just market share.
The fastest growing companies advertise, and they invest money in marketing. There are people out there who're searching for businesses like yours, products like yours, or for solutions you can provide. By advertising, you can put your brand and message in front of the right people. Or at least people with similar interests and behaviors.
By the way, mindshare is what makes people want to come to you, and mindshare is far more valuable than market share. Fast growth companies focus on both.
10: Recurring Revenue
Having a customer pay you once is great. Having a customer pay you multiple times is even better. And, the fastest growing companies have become masters at generating recurring revenue.
According to Forbes, the number of businesses with subscriptions has grown over 800% since 2014. It seems like every time we turn on the TV or scroll through our Facebook feeds we see ads for Blue Apron, Dollar Shave Club, or some company offering to send us trendy clothes in a box every month.
One benefit of subscriptions is that the per-month price is low enough to both encourage people to subscribe and to discourage them from canceling. It's only
$7.99 $9.99 $10.99 a month for Netflix, right?
With a subscription model, there's a significant decline in the cost of acquiring a new customer. Once people subscribe, if the content is good, they usually stick around and you don't have to pay to convince them to buy from you. The cost doesn't drop to zero, but acquisition costs do drop pretty close.
With amazing technology that's accessible to even small businesses, almost anyone can create a subscription model for their business and generate recurring revenue. Both my mastermind program and Catalyst Monthly generate recurring revenue for my company, and both continue to grow as subscribers get massive value for their money.
But wait! There's more!
The story doesn't end there. There are 10 more strategies fast-growth companies are using to experience massive increases in revenue. In March's Catalyst Monthly, subscribers will learn how Netflix has gone from $8 a share to over $220 in less than 10 years, and I'll share a personal story about how I learned the power of enhanced distribution (#20).