Startup is all about growth. In fact, startups are companies that are designed to grow fast. It means your ability to grow fast is what makes you a startup. Growth is a very important topic for startups and it is often misunderstood, especially in countries where startup ecosystem is yet to become mature enough.
Iraj Islam, now well-known co-founder of NewsCred, understands how growth works for a startup, why it is a survival question for most startups, what influences growth, and how one should think about it to build a great company. In a wonderful event, organized by Founder Institute Bangladesh, the co-founder of NewsCred gave a powerful talk on understanding growth and how it builds and breaks a company.
He invites all the founders to understand growth by taking a room full of founders and startup enthusiasts through hands on growth hacking process by using real metrics, challenges the conventional understanding of how growth works, and explains a bunch of powerful ideas to approach growth early on. “Growth does not come from spending money only,” he says, “it should come from every work you do at your startup.” He says if you really understand the metrics, work hard, understand what is important for your growth then things will fall into place and you will amazed by seeing the result.
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1. Startups are actually about growth.
“If you look at the definition of startup, Iraj says, it essentially comes down to growth.” Any company can’t be a startup. It has to have this one ingredient that enables it to grow really fast. “Growth is very central to any startup,” says Iraj, “but most often than not people mistake startups with many other things but growth.”
In Dhaka this misunderstanding is prevalent. People often define almost all the early stage companies as startups but in reality that is not the case. The whole idea of startup funding and investment stands on this single proposition that startups can grow fast and can become really big companies within a relatively short period of time.
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2. Growth is not about funding. Rather funding is about growth.
“People often come to me and tell how passionate they are about their ideas and startups and if only they could raise some fund, Iraj says, they would build a big company.” Building a startup is hard. And once things don’t go well, instead of experimenting and iterating people do all these wrong things. At FS we did the same as well for quite a long period of time.
People always ask all these wrong questions and helps. They ask for fundraising help, networking help, connection and more. “The answer to all of these questions is growth,” Iraj says, “if you can growth everything will work out just fine. If you have growth you would not be pitching investors, they will be pitching you. Growth is the solution for every single startup problem.”
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3. Growth is not marketing, so forget about spending in marketing alone to achieve growth.
“Growth does not come from marketing,” says Iraj, “and growth does not come from funding. Growth comes from doing the right thing and working on hard on your product and customers.”
There are companies like Secret that raised huge amount of money and then failed to build a successful business because they failed to maintain the growth. “Just because you raised some money and invested in marketing, it does not mean it will give your growth.”
Most often, growth starts with having a product-market fit and then once you figure out product-market fit you need to do all these crazy things to push the growth.
[su_note note_color="#ffffff" text_color="#363232" radius="0"]Read: An Interview with Iraj Islam of NewsCred [/su_note]
4. Have a framework for growth.
“Once you have your startup,” says Iraj, “it is useful to have a framework for growth, a framework that can help you to see the whole picture.” There are many ready frameworks out there. Iraj shows example of Startup Metrics for Pirates by Dave McClure of 500 startups.
Most people think about growth in rather a haphazard way. Having a structure before helps a lot in terms of putting things in perspective.
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5. Whole company is a growth team.
“There are multiple aspects to growth,” says Iraj, and “it requires whole company to work on it.” Acquisition, retention, and referrals are three main engines for growth and it is a team effort to make all three works. Where acquisition requires better distribution strategy, retention is a matter of better product and service and referral is same as well. As a startup you need to get your whole team in a place and ask everyone to do their 100% to keep the growth engine going. Your engineering and design team need to fix the products, marketing team needs to get the feedback from customers, try new distribution strategy and so on.
Once you have an awesome product, it is still challenging to get on board customers because competition is out there. That’s when you need to work on your communication. Understand the competition, work on your communication message, and tell the one thing that you are best at and that your customers want to hear.
Growth is fundamental to startup success. Once it was just a drawing on the other side of a napkin that investors wanted to see for funding but now traction is where conversation begins. Most importantly, if you have a growth which is sustainable you can build a company without worrying about funding much. Build for growth.
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Key takeaways:
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Note: The talk was recorded by Ruhul Kader and this piece is also edited by Ruhul. Image: Startup Grind Talk 2014
