Starting a new company is daunting and, to many, the most challenging part of entrepreneurship. Generating a fresh idea, persuading investors and forming a solid core team are all initial, necessary steps entrepreneurs must take to realize their dreams.
However, in many ways, moving past the gritty startup phase to become a successful, growth-stage company is even more challenging than first getting it off the ground. Setting internal teams up for success, supporting larger customers and gaining differentiation in the marketplace while shifting into a new role as a founder is not easy and requires a more strategic approach.
Many young businesses flounder at this critical point, which is one reason why half of all new businesses fail to reach the five-year mark. To avoid this fate and successfully grow a business, here are three experience-based principles that I found helpful in my own journey as co-founder and CEO of DeepIntent:
• Avoid being everything for everyone and instead focus on the one thing your company does better than most.
When starting a business, the “we can do everything under the sun” mindset can inhibit and, in some instances, crush a business and its employees.
For example, when launching DeepIntent, we knew there were already a dozen or so demand-side platforms or DSPs on the market that we’d be competing against. With that in mind, it would be very hard to go head-to-head on inventory or features—at least out of the gate. Instead, we focused on differentiating ourselves as a healthcare-centric platform by incorporating the use of real-world clinical data and tying that information to measurable business outcomes in real time—something that had never been done before.
The lesson: Although servicing customers is essential, no one person or company can do everything at 100% for everyone—this is like asking an athlete to compete in the Olympics at every single sport. Instead of spreading you and your team thin, focus first on 1-2 things the company specializes in and does extraordinarily well. Continue specializing with the goal of becoming an industry leader in that field—a trusted source that people recognize and respect—and keep building from that foundation.
• Work closely with customers to understand the market, identify gaps and seize opportunities.
Transitioning into a growth-stage company requires a clear roadmap and understanding of the market. It’s one thing to successfully prove a concept and another to become an industry leader. Key to this shift is knowing where the biggest pain points or frustrations are with customers and then using that intelligence to inform business decisions that actively improve the customer experience. For instance, before launching our most recent product, our clients provided key feedback during beta testing on the frequency of campaign reports that ultimately led to an end result they knew to be more valuable in the real world.
Take active steps to create a continuous feedback loop and open communication between product development, sales and marketing. This is essential to understanding customers’ past experiences, current challenges, and future goals to gain momentum in the marketplace.
• Develop a strong internal team and master the art of delegation.
As a company grows, its team must also grow—and with the right people. Establishing appropriate standards for hiring new employees, structured around core principles and shared purpose that form the foundation of trust, is critical.
I frequently describe myself as a “product CEO,” which means that at some point I have been involved in nearly every detail of the business. As our company quickly scaled, however, I needed to reassess my role—for my own wellbeing and that of the company.
According to a recent survey, “49% of CEOs report struggling from a mental health condition, and the majority of CEOs say that they are feeling overworked, struggling with fatigue and suffering from continual stress.” Clearly, mastering the art of delegation is easier said than done.
I can remember a time when I was approaching a near-critical zone of burnout. I was intimately involved in too many aspects of the business, and it became seemingly impossible to not work 14–15 hours a day. My health took a toll, and I wasn’t focusing enough on other important areas of my life. I needed to restore balance in my own life in order to continue growing the business. It became clear to me that delegating tasks was key to driving the company forward, which required building a world-class team—one to whom I could trust to make critical decisions. To this day, recognizing the signs of oncoming burnout and focusing on mental health remains a priority.
The road to success is paved with twists and turns; a lot of people think success stories in entrepreneurship follow a straight path—launch a business, grow, and have a successful exit. The truth is that success is rarely ever a straight line. Entrepreneurship is as much about course-correcting and failure as it is about the wins. There is inherent risk when bringing any new product to market or breaking through to an industry, but with experience in the domain and a little luck, founders can mitigate those risks and achieve growth and success.