STAGE 1: THE BEGINNING $0 TO $1 MILLION
I gave a talk at DCxAustin last week called Spinning Plates: How To Scale By Fixing Operations.
I covered the first two early stages of growth. In this post I’ll cover Stage 1 — Getting to $1Million.
The biggest problems of a Stage 1 business are getting the marketing and sales plates spinning.
You’ve got a product or service, right? But who wants to buy it?
You’re number one job in Stage 1 is figuring out how to get customers at break even or better. If you’re funded or have a big savings account you can get customers at a loss (eventually you have to figure out how to make money from them).
In Stage 1, you are trying to get Product/Market Fit, then Message-To-Market Match so that you can develop your Optimal Selling Strategy.
- Product/Market Fit is making the right product for the right market. This could mean testing different markets for the product you have or tweaking the product you have for a market, or both.
- Message-To-Market Match is testing your marketing to get the greatest impact from your market (the one you found in P/M Fit).
- Your Optimal Selling Strategy comes out of the above. You’ve found the right introductory market, developed your product to serve that market, dialed in your marketing messaging and now you have the makings of a sales funnel. Your final step is figuring out the best way to sell the product. When you have all those elements you have your OSS.
The operations of your company should focus on those 3 things — they are your highest priority until you’ve reached $1 Million in revenue.
Operations is there to support product improvement and market intelligence.
Operations has to develop a solid marketing team, and depending on your product, a sales team.
Everything else is secondary.
Will you be doing other things? Yes, but they have to take a backseat until you have the above figured out. The $1Million mark is arbitrary, but it does signal that you’ve learned a thing or two.
One guy at the talk asked what a Stage 2 business should do if it had just 1/10th of $1Million as revenue ($100,000). My answer was quick and simple, “you aren’t a Stage 2 company.”
He hadn’t figured out how to sell his products yet (he’d already developed multiple products before figuring out if his front-end product had Product/Market Fit let alone Message-To-Market Match.
Could it be possible to be a Stage 2 business at $100k in revenue? Meaning having P/M Fit, MtM Match and an OSS figured out.
Probably, but unlikely you’d be only at $100k unless that was most of the existing market. That would mean you were way too niche and need to find a bigger market for you product.
Later I’ll do Stage 2 (you’ll need to join The Forge to read part 2).
Hit me with any questions you’ve got on Stage 1.
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