For startups, particularly tech startups, there is a certain lifecycle that is adhered to. An idea is formed, a business is created, seed money/early stage capital is sought, money raised is used to bring idea to market, money gets spent (usually faster than projected), more capital is raised, idea gains market share, more money is spent, more capital is raised, idea has a strong market value, the capital providers request an exit strategy, the business gets sold/merged/etc. Rinse and Repeat. For some serial entrepreneurs this is an ideal way to start and dispose of businesses. However, there is another path that startups can take that allows for the business to be cultivated over time. That is the path of slow growth.
A couple of fore warnings about the path of slow growth. By the nature of its name, it is designed to be slow. This is not a get rich quickly plan. This path also takes much patience. There will be times when it will seem very easy just to abandon ship or to go back to the lather, rinse, repeat cycle of the typical startup. However, the long term rewards of the slow growth will outweigh the instant gratification that comes from the typical lifecycle path.
Slow growth in the context of growing your business means that you as the business owner to get a true understanding of what your business is, where you want your business to go and allows you to make calculated, measured risks without jeopardizing your business. You are not encumbered by outside capital and the short time horizon it demands. You can make pivots where you be see fit and take the long view of your business. A slow growth business does not need to be an overnight success.
Growing your business slowly has some very distinct advantages that sets up your business for the long haul. Here are the three key advantages to the slow growth model:
1. The ability to say no. A typical business will try to gain as many clients as quick as possible or sell as many products as fast as possible. That usually means taking on clients that are substandard or selling products that are mediocre. If you are trying to grow your business quickly, you may think any sale is a good sale. However, if you are in the slow growth mindset, it does not make sense to take on a bad client or to sell a product that is not ready for the market. As an accountant, I could say yes to every bad potential client that calls me in the interest of growing quickly, however, that would mean that I would have clients that were not good for my firm and distract me from the great clients that I already have. Time being spent on bad clients or bad products is time not being spent on good clients or good products.
2. The ability to quietly make mistakes. When you are growing fast, taking a risk and making a mistake could be detrimental to your business. However, when you are growing slowly, you can take some risks and make some mistakes in the anonymity of being small. In the small growth model, your mistakes are temporary learning opportunities rather than broadcasted out failures.
3. The ability to plan for the long haul. The slow growth model allows your business to think long term in how and where it wants to grow to. Without outside investors, your business is not being pushed to be successful overnight or forced to look for exit opportunities. You have the ability to get your business started up and running and then grow as you want. Some slow growth businesses will take seasons to stop growing completely in order to better understand where they want their business to be in the future or to focus on their existing customers in order to be a better business overall.
Slow growth may not be for your business. The market may be clamoring for your product or service now and you don’t have the luxury of growing slowly. Or your idea may be time sensitive and failing to deliver your idea to the market may render it moot in the future. However, if your business does not fall into those categories, then maybe taking the path less traveled is a better and more viable option for your business than going for the quick buck.