Startup Strategy: Grow and Harvest Your Business
in Strategy & Trends | by Ethan Lyon
As business builders and brand developers, we enjoy learning from Seth Godin. I found his recent blog post on the importance of sowing a startup seed and harvesting the crop to be particularly on point (see below for an exerpt). Many entrepreneurs struggle to develop a great product, and even after building a great product the road to significant market share may be difficult and take longer than expected. When businesses finally start to clear hurdles and gain momentum, you must be prepared to maximize returns through harvesting.
Your overall strategic plan should reflect opportunities for harvesting. In product development, are you building features and benefits that match the needs of the market? Can you get a few steps ahead of the competition? Do you have the funds necessary to impress market insiders?
When you are working on your beta launch, choose your clients wisely. Will a great experience turn into positive word of mouth? Is this a client case study and testimonial that can be leveraged to gain more clients because their opinion is respected and market needs are similar? As you deliver great work, will clients reward you with more valuable contracts? As you succeed, are you prepared for a big sales and marketing initiative to sell into new clients and implement with high success? With each step, you must build on the next. As you gain momentum, you can grow by leaps. When you finally get your opportunity, you must be prepared to harvest.
The goal is to reach the point where there’s some harvesting going on. The first sales might cost you a hundred or thousand dollars each to make. At some point, though, you want sales to happen for free, people to show up with money. At some point, you want word of mouth to replace promotion and to earn back the money you invested up front…Here are some of the elements of a market where you are likely to reach the point where you can harvest the benefits of your investment:
- Word spreads. You want a market where stories of your success and reputation will reach other prospects.
- Needs are similar. You want a market where the skills you developed to help one person can also be used to help another person.
- Budgets exist. You want a market where there is more than one player with money to spend (on you) to solve a problem.
- Barriers exist. The market should reward insiders (like you) but make it really difficult for copycats to come in and steal share and lower prices.
- Price should rise with value delivered. As your work spreads and your reputation increases, you should be able to charge more, not less.
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