Six Startup Growth Strategies
Your startup just got funded. How do you scale and get to a billion-dollar IPO? Here are 6 ways to grow your startup.
Startups equal growth, and you need a lot of it. Can you triple your revenue two years in a row then double it three years in a row? That’s the bar for a SaaS company to get to $100 million a year in revenue and get to an IPO.
Below are half a dozen ways to grow your startup that I usually think through. Remember every startup is totally different. History doesn’t repeat, but it does rhyme. These lyrics might just work for you.
Tip 1: PR
PR is a great way to think about how you get people in the door. A good press article can move the needle for you.
Here is how I did it in 2008 at Posterous. When we were actually making new features, we made sure that every single new feature turned into a news article by one of the big blogs — TechCrunch, VentureBeat or Mashable. Every time I made a new feature, I made sure to get coverage. However, getting this type of press coverage is really hard in 2021. I’m not sure if you can actually get coverage for every feature anymore….
But it also doesn’t always have to be good news either. Do you remember Soylent, the meal replacement shake for software engineers? I remember meeting them at YC and funding them right when they went from being a networking hardware startup to their current idea. I actually told them to change their name. I said, “Don’t you know what Soylent Green is?”
But I was wrong. They ended up building a huge recurring revenue business with minimal marketing spend because they got hundreds of millions of dollars of free advertising all just by PR, blogs, videos and news articles about the name itself.
I don’t like this, but the reality is controversy sells. It’s hard to pull off, but it was one of the strongest lessons to learn lately, especially around this idea that every business is now a meme. If you have a good story that touches your users, is meaningful or valuable to society, or even controversial and sparks a lot of discussion, you got to keep PR in mind in terms of how you can grow.
Beware, though. These things tend not to scale, and most startups cannot rely on this at all because most reporters, and even bloggers, are generally focusing on much bigger stories, especially in 2021.
Tip 2: Sales & Marketing
Say you’re lucky: you have product market fit; your team is humming; customers love it; and you have great retention. How do you grow?
This is where sales and marketing come into play as . For sales, there are two books that I recommend: “Predictable Revenue” by Aaron Ross and “Founding Sales” by Peter Kazanjy. Sales is incredibly important, and for those $100,000 contracts or larger, you need enterprise sales.
For marketing, there’s just so many ways to do it. Read on for a non-exhaustive list just to give you some sales and marketing ideas.
Tip 3: Content Marketing
Content marketing is a great way to get attention. It just takes you writing informative articles full of facts and data — things that people actually find interesting to get the story out there.
My favorite example of this is OkCupid. They were able to grow their user base massively just by using statistics about dating from their user base.
The most extreme version of this that I saw with my own eyes while I was a partner at YCombinator was actually a startup called YourMechanic, which made tens of thousands of blog posts about every possible thing that could go wrong with your car. All of it led back to their homepage, which is a marketplace for car mechanics. I’m pretty sure they got thousands of leads per day just because of that. This leads actually perfectly into the next section, which is basically SEO or search engine optimization.
Tip 4: SEO
If the internet is one brain and you can show up top-of-mind when the brain is looking for info about something, it translates into many, many new customers for you basically for free, sometimes enough to build a billion dollar startup.
The craziest example that I saw is Zapier. Zapier was a YC company that built a fundamental piece of what we now call no-code and low-code. It lets every possible cloud service work with every other one, and the approach was really simple: make a connector for every possible website connecting to every other one. Say, for example, you want to connect Gmail to Airtable or Trello to Slack. The cloud is growing so quickly. There are so many people trying to figure out how to get these tools to work together, and when they search for it on Google, they found Zapier.
Today Zapier is worth more than a rumored $4 billion. I suspect a good chunk of it is connecting the highest intent thing in the world — a Google search — to their service and then just having highly ranked pages that took many years to become top of that search engine. This is the most dramatic form of winning the internet I have ever seen.
Now, if you can’t win the internet, sometimes you can buy it, i.e, Google ads. You could also call this strategy search engine marketing (SEM).
My wife actually worked at Google for a few years as an ad optimizer in their operations team, and the craziest story I remember hearing from her was that some of her clients were literally optimizing ads for colonic kits (i.e., colon cleansing). Some of these optimized ads started off as tiny operations, maybe $100 to $1,000 a month, and as the companies made profit, they reinvested in online ads to get to as much as a million or $10 million a month in revenue.
It sounded crazy to me at the time, but now I realize that’s actually relatively common to reinvest. There are actually a lot of ways that you can reinvest your profits in SEM. If you can buy ads and make more money from them than you paid for them, it’s a powerful engine for growth. It’s not that common, but it still does happen.
Tip 5: Influencers
We can’t talk about marketing without thinking about social media. Both social media ads and social media influencers are an amazing way to get customers. There are too many examples to name really, but think of almost any D2C brand that rose up over the past few years. You’ll see that they did it on the back of Facebook, Instagram, Snapchat or even Twitter. Just look at what Rihanna was able to do with her brand, Fenty, or what Ryan Reynolds was able to do with Aviation Gin.
Now, for more resources, I recommend that you follow Nik Sharma on Twitter. He’s a wealth of knowledge when it comes to working with influencers and leveraging social media to actually build a great brand.
Tip 6: Partnerships
Finally, we can’t talk about how to grow without thinking about partnerships and business development. Probably the most famous example of this was actually Microsoft with IBM. Somehow Bill Gates got IBM to choose MS-DOS to be licensed as the operating system for their new personal computer, the IBM PC — that choice alone literally made Microsoft. Today, it remains one of the most durable cash cows for that tech giant, one that set them up even for success with Microsoft Office and productivity software.
This isn’t a complete list of ways to grow your startup, but I hope that it gives you a good sense of where to start.
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