L-SPARK is introducing a blog series featuring expert advice from our community of mentors and advisors. Each entry will provide expert advice for startup founders and entrepreneurs.
The first in the series is by Chris Johnson, a software and communications executive with 25 years of experience who has led companies from their initial phases through to acquisition, including dna13. He outlines his strategies for transitioning a startup to an established company.
Establishing a startup is one of the hardest things anyone can do – developing, marketing and trying to sell a new product or service is a daunting task that inevitably will involve a lot of trial and error.
There are many types of business models, but only a few foolproof ways to transition your startup to an established and stable company.
1. Seek out mentors and advisors with experience in your industry.
Without leveraging other people’s help, early stage companies tend to be in a weaker position. Ignoring the advice of those who have already “walked the walk” is a fundamental error. Consulting with a person who has had past successes can save a company from wasting countless hours and financial resources on strategies that don’t work. Naturally, spending time with industry veterans will provide you with tips to scale up your company and allow it to grow at a much faster rate.
2. Validate your product.
Product validation is an extremely important aspect that a mentor can help facilitate, further emphasizing the importance of my first point. If your startup’s product or service idea is not solving a pain point, then you should shelve it. Again, growing a startup is about trial and error. If you have developed a software solution, it’s very likely that it will go through several iterations and be shaped by customer feedback. Before you can scale up, your product needs to be tried and tested.
3. Be prepared to pivot, if necessary.
If your product is not solving a pain point, or you’ve identified another market need that you can fill, be prepared to shift the focus of your startup. Being reactive and having the ability to adapt to changing circumstances can ensure growth and sustainability. The guidance of an experienced mentor can assist in the decision to pivot and go forward with a new company direction.
4. Crack the code on sales and marketing.
A proven method of customer acquisition and retention is a key data point that signifies a company’s maturity level. If you have figured out how to drive leads on a repeatable basis and how much it costs to acquire each lead, you’ve nailed your sales and marketing strategies. In order to define effective strategies, it’s necessary to pilot different types of marketing campaigns and measure what works and what doesn’t work.
The switch from a startup to an established company won’t happen overnight, so it’s critical to be diligent and patient, as well as open-minded to external feedback and advice.