The five phases of start-up transformation

Cam Hassard

You’ve set up your business and it’s moving, but there’s a crossroads ahead. It’s one thing to get things off the ground but another set of tricks to scale.

“Businesses that succeed have a deliberate process as they move between stages of development,” says Phil Morle, founder of Sydney-based energy start-up incubator, Pollenizer.

But to understand how this metamorphosis occurs in reality, it will be helpful to think of ’business growth’ across these five interrelated shifts:

Opportunistic to strategic thinking

At first, there was wide-eyed enthusiasm: opportunity, optimism, the exploration of new relationships and possibilities.

But an ad hoc approach to business can only sustain for so long. As ‘transience’ turns to ‘sustainability’, insights gained early on need to grow into processes that multiple staff can run repeatedly.

“This can be challenging to founders,” says Morle, “because there does need to be a consistent force to propel them through the change.”

Morle’s Pollenizer calls this force ‘the massive,’ a driver that draws a business to its logical end goal.

“We may pivot and tack our way along, but we are always pulled towards this massive.”

Morle, and partner Mick Liubinskas, certainly went massive with their peer-to-peer network, Kazaa in 2008. They’ve since developed Pollenizer into a platform used by thousands of entrepreneurs across Asia Pacific, and some of the world’s largest companies including Singtel and Coca Cola.

Projects and services to products

As your business grows, some staff will find it increasingly difficult to cover every project. According to Morle, founders need to extract the core “components that make a project successful and triangulate into a repeatable way of describing, selling and delivering a product.”

Speaking as the ‘Start-up Evangelist’ at Sydney-based incubator, BlueChilli,

investor-advisor Alan Jones sees this as a relatively organic, if not common sense, shift.

“Businesses usually develop services by being repeatedly asked to complete similar projects – sooner or later, you realise you’re repeating yourself and you can save time and increase profitability by working from a template based on these recurring projects.”

With BlueChilli well on the road to building a $1 billion portfolio by 2020, Jones has overseen countless project to product transformations.

“In some cases, turning a service into a product means providing a framework within which a variety of people outside your organisation could deliver the service […] In other cases, you turn a service into a product by capturing the intellectual property and processes used to deliver the service in such a form that it can be transferred to the customer.”

Ownership to partnership

Leveraging partnerships becomes a prime necessity as your enterprise gains steam, with solid benefits – such as, according to Jones, “reducing the cost of customer acquisition and building brand trust through association.”

“Some value chains are complex and there are too many blockers to get there on your own,” adds Morle. “For example, there may be a large company that already has the distribution channels sewn up. Partnering or licensing what you do to them may get a business to ‘massive’ faster with less friction.”

Jones says “if you’re launching a start-up and nobody has seen or heard of your brand name before, you need to build brand trust as rapidly as you can.

Ultimately customers learn to trust your brand through repeated positive sales and customer service experiences – but sometimes it’s possible to ‘hack’ (or accelerate) that trust by being introduced to that customer via a brand that the customer already trusts.”

People to process

As a corollary of your new strategic bent, your business ought to rely less over time on a cluster of talented staff, and instead embed their expertise across the organisation through mentorship and training.

The first challenge, says Jones, is to have the discipline and focus to be able to spend enough time on the business (rather than in the business) – to study the underlying processes in the delivery and sale of a product or service:

“If you’re still at the coalface most of the time, you’re never going to have the perspective necessary to understand what’s happening in the whole process of turning coal into something which can solve a valuable problem for a customer,” he says.

Relationships to brands

Smaller companies tend to rely on staff as primary customer go-to’s – but what happens when they leave? Generally speaking, the less a business has to lean on individual relationships for sales, chance are the better off they’ll be in the long-term.

“As products are consistently delivered, the brand starts to take on a life of its own,” says Morle. “Teams should listen to the market speaking back to them. How are they described?”

But evangelist Jones reminds that relationships should never be forgotten.

“Know what “brand strength” really is? It’s the aggregate result of countless positive brand experiences you’ve delivered to your customers. […] The moment you stop relying on relationships and start relying on brand strength, you’ve begun eroding your brand strength.”

Cam Hassard

Cam Hassard is a journalist and writer who has commented on a diverse range of global issues, industries and ideas. Cam has contributed to a number of publications including Fairfax Media, Spook and Huckberry. 

Take a look at all of our content to help you understand what it means to grow a business including how to deal with fast growth and some ideas for what you can do to help your business grow further. 

 

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