The key to surviving the Valley of Death spells Scale.
The 2nd box within our blq box approach to how we work hands-on with our portfolio companies is Scale. Creating business models that scale allows scaleups to progress with their customers, while recurring revenues provide a solid base from which to add further value. Go-to-market strategies, growth hacking and solidifying niche positions are key areas of organisational support for us. All at the while driving underlying profitability through clear value propositions.
In our world, Scale is what will ultimately make or break a company. Many companies experience a rapid scale during the early years, fuelled by equal parts enthusiasm, good ideas and hard work. But those early streaks rarely last forever. As the company grows it becomes more and more challenging to maintain those high growth rates.
A systematic approach
If ARR is to grow 100%, the underlying growth drivers need to grow as well. Either through maximising input, or optimising output. The goal is always to scale smarter and more efficiently – not through pouring resources into a faulty system that risks cracking under pressure. For early stage companies, the most challenging part of this tends to be setting the blueprint for scale while scaling – quite similar to building an airplane while flying.
The market is our north star
For us, the key part of the answer to this question spells the market. The market dictates how, where and how fast we scale. Iterating with the market allows us to find our sought target position in terms of value-add. Either establishing a new position in a set value chain, or creating a new one altogether. Given where we want to be in three years, where do we need to be in one year? What position in the market does this entail? What are the strategic bets we need to make in order for this to happen?
Scale is the driving force behind the commercialisation of a company. While the commercial playbook is unique to each startup, we believe that a flywheel approach creates a powerful growth engine. Utilising market-driven product releases to generate buzz through proactive marketing creates strong opportunities for sales to drive new clients, while customer success cares for the customer and user base to create retention and upsell. A unified company driving in one direction is much more powerful than separated teams of a company moving independently of one another.