I could not believe my eyes. There it was, white letters on a nondescript black sign: “Xerox PARC.” The birthplace of the computer mouse, graphical user interface, Ethernet, and the laser printer. Just blocks away, Venrock and Stanford University, home of Yahoo, Google, and countless other tech world changers.
I spent the day with a group of super-sharp executives from a fast-growing tech company, now publicly traded with several billions in revenue. That evening I had dinner overlooking the San Francisco Bay with a long-time friend who is building a tech firm, now profitable with several millions in revenue, but still emerging. The week prior I interviewed the CEO of another tech company called Bigcommerce, with 200 employees and 30,000 clients.
Look across these three trajectories–the emerging startup, the fast-growing mid-market, and the multi-billion-dollar global–and you see a blueprint, three counterintuitive answers to the question of how to build a fast-growing business.
As I consider now taking on building a consulting firm around my IP, these three elements are driving me toward clarity. Perhaps they will do the same for you. Think of these as three steps on your path to growing something big.
Start now, plan later
VCs and business school professors advise you to carefully assess market potential before starting to build your business. They prescribe market sizings, break-evens, and customer insights. While this advice is logical and large companies follow it, successful startups seem to do things in reverse: They start first, then assess potential.
Xerox was invented by a lawyer who got sick of duplicating documents, so he rented a room to tinker with copying technology. Virgin was born without a business plan, and Richard Branson continues to repeat this “mistake” to great success.
Bigcommerce began long before they saw their market potential. The founders, Eddie Machaalani and Mitchell Harper, shared with me that they started off building small programs to help companies manage e-commerce. It wasn’t until they were formally raising money that they did some basic calculations and realized their market had the potential to support a huge business.
As they shared, “A lot of people get into building business plans. That doesn’t work. You’ve got to dive in and just make it happen. Once you do, doors start opening.” They even have a name for this attitude–GSD, as in “Get Sh*t Done”–and they look for it when they hire people.
Ignore the formal process and instead find a problem worth solving. Start building the solution. Get to work. Worry later about where the solution might take you. Remember what Sophocles advised in 400 BC, “One must learn by doing the thing, for though you think you know it, you have no certainty until you try.”
I have been working on a detailed plan to build a software tool, seeking funding, finding the right developer. But I have large-scale programs coming up in the next two months with four Fortune 500 companies. Instead of waiting to line up everything perfectly, I’m going to immediately build a couple more simple tools and put them on a password-protected page for my clients. It will cost me $1,000 and a few days of work. But I know that when people see what these simple tools can do, “doors will start opening.”
Pursue the impossible
When the guys at Bigcommerce did their market-size math, they realized they had been playing too small. “We did research and the numbers were off the charts … the number of new small businesses being created. We did some basic calculations, and without a lot of aggressive assumptions, we realized this could be a $1 billion [in value] company. [Our goal] used to be to build a $100 million company.”
My friend at the emerging startup experienced the identical pattern–after they started the work, they discovered they were onto something far bigger than they imagined.
Now is the time to set a seemingly impossible challenge for yourself and your team, otherwise you can get stuck in a self-fulfilling trap. Big ideas always at first seem impossible, so if you don’t start pursuing something big until you already have the solution, you will never seek out the solution. As Albert Einstein said, “If at first an idea is not absurd, there is no hope for it.”
“Getting comfortable with that [$1B] number took some time,” Eddie and Mitchell shared with me. But until you set a goal that scares you, that is impossible to achieve with your current behavior and plan, there is, by definition, no need for you to try something new.
Your impossible goal creates clarity. Eddie and Mitchell, for example, saw immediately their need to rebrand their business and redesign their product so that someone without a technical background could configure it.
Do you have an impossible goal? How do you react to its impossibility? Do you shy away from the impossible or embrace it as the inevitable start of something big?
This week I have set aside three hours to clarify what impossible goal calls to me. Pull out your calendar now, schedule the time to sit down and decide what you would love to have created but think is impossible.
Design a 10X organization
Bigcommerce is not the first team of successful ventures to tell me about the “10X” concept–the idea that you imagine that tomorrow your organization would have to deliver 10 times what you are delivering today. If you sell $500,000 per year, you imagine $5 million. If you produce 400 widgets, imagine 4,000. Then you ask “could our current structure get us there? If not, what must we change?” The exercise reveals breaking points in your organization.
I suggest you apply a well-tested model to dissect these breaking points. The “congruence model” suggests you should seek alignment between four aspects of your organization: the tasks your company must perform, the people who perform the tasks, your formal organizational structure, and your informal organization (or your culture). Click here for a great article on the model. By walking through these four aspects, and analyzing their interconnections, you will see what you must change to engineer yourself for your 10X future.
Bigcommerce, for example, saw it needed to make changes across three out of four dimensions:
- Tasks: To run their business they need to sell, develop, support clients, and grow the business. They had to do these globally and consistently, while remaining entrepreneurial. This would define what people, culture, and structure they needed.
- People: To reach 10X, they needed to reengineer their team, so they brought in a CFO with the experience and ability to take a company public and raise capital.
- Culture: They clarified the right core values (remember “GSD”) and hired and fired people based on their compliance with those values.
- Formal structure: They run their R&D team as 12 mini startups to keep them nimble; they keep their executive team in Australia while all of their sales and marketing (and 70% of their revenue) come from the U.S. This latter choice gears them to act globally from day one, enables them to quickly expand into new markets (because they know how to manage remotely), and helps keep the founding entrepreneurs who “constantly want to do more” from distracting the team. “It helps you step out of the way,” said Eddie.
Imagine your 10X company and ask where are the breaking points in your organization and what unique characteristics do you want to imbed now across:
1.The tasks your people perform
2.The people who work there
3.Your formal structure
4.Your informal structure (culture)
These three principles–starting the work, pursuing the impossible, and designing a 10X organization–have laid the foundation for impressive growth. Bigcommerce has grown to 200 employees from 50 one year ago, to 70 developers from seven, and now serves well over 30,000 clients.
I spent 30 minutes thinking through my plans and put together a workbook to help you think through your business using this framework. If you’d like a copy, email me at email@example.com.
[Image: Flickr user Björn Sahlberg]