When we eventually launch our startup, the first thing most entrepreneurs are worried about is how to go from small to big — how to take over the market and how the business will expand and reach more people.
We know that before investors can take a look at our startup, they need to see some sort of traction and the ability for the business to grow. So we fall into this trap of worrying too much on expansion- “oh we need to 2X our market share” “we need to reach those on the east coast and not forgetting the west coast”.
We get so carried away be this type of growth (expansion) that we eventually run out of business the way HomeJoy did. Most businesses fail not because the idea wasn’t awesome nor because it doesn’t resonate with a lot of people, but because the business model is terrible.
HomeJoy got so carried away with growth that they invested in getting new customers and forgot about retention. They offered discounts, did a lot of promos to get customers. Not only did these promos cost them a lot of money, they weren’t able to keep them. Once a customer, uses their services, they never came back and that was how a startup that had crazy potentials crashed.
Growth is not the most important thing in a business
So what should you worry about?
Instead of worrying about going big (expansion) worry about staying small (retention), because, small is the new big. Carve out a niche for your startup, tell that niche (or tribe) a good story about your business (it might be the way you answer phone calls or the way you shake their hands or how clean your toilet seats are or anything awesome).
Then the next thing to do is respect your tribe/niche/market. Take your customers seriously. Do all you can to make sure they come back. Focus more on keeping your current customers than pitching new ones. It is easier for you to convince old customers than new ones.
The best kind of growth is RETENTION and not EXPANSION
And you know another reason why Retention is better than expansion as a small biz owner or a startup is that when you tell a great story and you create a platform where people can easily share the story, your customers will tell their friends about you and those ones will in turn tell others until you eventually become big.
Small is the new BIG
Before you go
You have an awesome idea> carve out your own niche > Tell them a great story that resonates with them > Earn their trust by respecting them > Make sure there is a platform where they can easily tell people about you and your story > They tell their friends> Friends tell other friends> Your startup becomes a BRAND
Check out what Forbes said about HomeJoy.
Originally published on Sadiq’s Blog.
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Sadiq Daniel is a Serial Entrepreneur and Teens Coach that blogs on business, Self- development, Life lessons and Ideas that challenges the status quo… You can pursue him for a speaking engagements on Twitter: @sadiqspeaks LinkedIn: Sadiq Daniel and Email:[email protected]