Growth is growth. There is no debate about it. And it’s not a bitch unless you’re focused on the rate of Growth, and not Growth itself.
For context, a few days ago, Semil Shah wrote a post entitled “We need to have a debate about Growth”, and Fred Wilson posted today “Growth is a Bitch.”
It’s not fair to compare the characteristics of growth between a mature company like Apple, and a thriving startup that is on a growth trajectory.
Yes, Apple’s “rate” of revenue growth has slowed, BUT it is still better than Google, Microsoft, Best Buy or Red Hat.
In absolute terms, Apple grew their Quarterly revenues by $4.5 Billion this quarter vs. same Q in 2012. That’s a lot of Growth. Apple’s 4th Quarter has always been an anomaly because of Christmas buying ($54 B in Q4-2012), so you can’t compare Q to Q that way. On a year-to-year basis trailing revenues, Apple did $169 Billion of revenue in the past 12 months vs. $142 Billion the year prior, so that’s $27 BILLION in GROWTH.
If this isn’t Growth, I don’t know what it is.
I worked at Hewlett-Packard during 14 years when the company grew from $2.5 Billion to $32 Billion, so I saw first-hand what real growth meant. We never used to talk about “rate of growth”. It was just about the growth percentage, quarter after quarter, and year after year. If you are a $1 Billion business, and you grow at 7%, that’s $70 million to the bottom line, and if your expenses don’t grow as much, then you have also improved your net earnings, and that’s a wonderful thing for all stakeholders;- shareholders, employees and customers. Plus, the numbers compound, year after year.
Yes, the “rate of Growth” is difficult to maintain for a very large company like Apple, but Growth rate challenges shouldn’t even enter the vocabulary of a startup because the numbers they usually come from are so small, that these percentage are misleading.
Only 3 Ways to Growth
For any company, you grow 3 ways. It’s been the case for centuries, and will probably remain that way for a long time:
- By having more products to sell
- By finding more customers to sell to
- By entering more markets with larger opportunities to sell
I’m not counting acquisitions, which are temporary artifacts of growth, aimed to achieve one of the above goals, although sometimes you’re acquiring technology or people, but that’s also so you can develop products or go sell them somewhere.
Growth and Startups
Semil Shah says in the comments of his post, “we need Growth Forensics”.
Well, the Growth forensics for a startup are fairly simple.
1. Grow your capital raises
As a startup, you’re focusing on securing increasingly larger amounts of capital so you can continue to finance your growth.
2. Grow your number of employees
You will grow by hiring more people. And sometimes it becomes one of the biggest challenges you face, if there is a shortage of qualified talent where you are. Focus on that.
3. Grow your users
For a startup,
Growth doesn’t equal success. Many startups confuse the two, and focus on user growth and acquisition for too long before they pull the trigger on revenue experimentation.
Reality is Growth is not an indefinite thing, UNLESS you are a platform, like Facebook, Google or Twitter. Only platforms can continue to grow for a very long time, but most startups can’t become platforms.
4. Grow yourself
If you are a founder and never been a CEO, you need to grow yourself, and you’ll need to let your employees grow too. Without that, there is no company growth. You can read here about
founder to CEO transitions.
A startup is a constantly evolving dynamic organization that has many growth lives. Every time you double your staff, it’s almost like having a new company.
5. Growing your customers
If you are lucky to have a product you can sell early on, and you have achieved product/market fit, then I would argue you’re not a startup anymore, because you have figured your business model. Then, you just need to grow by hiring sales reps and banging on the right doors, or totally fine-tuning how you convert digital users to paid customers, if you’re getting your orders online.
6. Grow your products
After the initial product/market fit success, you will need to either extend your product with add-ons, or add new ones. Don’t kid yourself about the single product growth fallacy.
7. Grow your markets
Go internationally or add distribution channels or partners. Reach more places where your products and services are wanted, whether it’s the physical space or online footprint.
Growth is Growth. It is what it is. Stop debating or bitching about it.]]>
If this isn’t Growth, I don’t know what it is.
I worked at Hewlett-Packard during 14 years when the company grew from $2.5 Billion to $32 Billion, so I saw first-hand what real growth meant. We never used to talk about “rate of growth”. It was just about the growth percentage, quarter after quarter, and year after year. If you are a $1 Billion business, and you grow at 7%, that’s $70 million to the bottom line, and if your expenses don’t grow as much, then you have also improved your net earnings, and that’s a wonderful thing for all stakeholders;- shareholders, employees and customers. Plus, the numbers compound, year after year.
Yes, the “rate of Growth” is difficult to maintain for a very large company like Apple, but Growth rate challenges shouldn’t even enter the vocabulary of a startup because the numbers they usually come from are so small, that these percentage are misleading.