Growing a business is always challenging, but it’s often the hardest in the earliest stages of development. You’ll be operating with limited resources, limited knowledge, and quite possibly, a business model poised to change in the immediate future.
Still, you need to find some way to pull your company out of this early-stage quicksand. You’ll build momentum with marketing, advertising, sales, and other strategies optimized for quick, self-sustaining growth.
What are the best tactics to accomplish these goals?
Core Challenges to Overcome in Growth Strategies
First, we need to address the core challenges of developing effective early-stage growth strategies for new businesses.
- Limited capital. Many new businesses have a small customer base, limited revenue, and a finite amount of funding to work with. In some situations, that renders the marketing budget exhausted from the start. You can’t afford to hire a full team or place a Super Bowl ad, so you’ll need something more reasonably priced.
- Limited brand equity. Coca-Cola has an astounding amount of flexibility to work with when advertising. Why? Because people already know it. Building a brand’s reputation from scratch is an entirely different challenge.
- Limited knowledge/experience. Even if you’ve done some market research to start your business from scratch, you still have limited knowledge and experience in this sector. You may not know your target audience’s psychology well, or you may not know which marketing strategies work best.
- Balancing short-term and long-term growth. If you focus too much on short-term measures, you’ll have trouble sustaining long-term growth in a cost-efficient way. Conversely, investing too heavily in the long term will make it harder to generate initial momentum. You need to find a balance.
An effective early-stage growth strategy would be:
- Inexpensive, capable of being executed on even a limited budget with a limited team.
- Accessible, convenient to execute even for brands that aren’t yet established.
- Flexible, capable of evolving as you gain more knowledge about your target audience and niche.
- Balanced, with a decent short-term payoff and decent prospects for the long-term future.
Let’s take a look at the most effective strategies that meet these criteria.
One of the best strategies to fit this mold is content marketing. The idea here is to develop “content” in the form of blog posts, whitepapers, eBooks, photos, illustrations, videos, podcasts, and anything else that can inform and/or entertain your audience.
Each of these pieces serves as an independent magnet for customer attention. If you provide answers to common questions, educate consumers, and provide things that people need, they’ll naturally seek you out (and hopefully, buy your product once they trust you).
Content marketing is also effective because it has a natural synergy with search engine optimization (SEO). Writing great content, optimized for the right keywords, can increase your likelihood of ranking in relevant search engine results. Higher rankings mean more organic traffic – in other words, more people finding your website naturally.
Content marketing is cheap, it’s accessible, it can be transformed and optimized to serve different goals, and best of all – it’s effective both as a short-term and long-term strategy. In the near-term, the right pieces can help you attract new readers and customers. And after several months to a few years of development, you’ll have such a reputation established that each new piece of content you create is inherently valuable.
The only catch here is that you’ll need some support to generate initial visibility. New blogs don’t get much attention naturally, so you’ll need a complementary strategy to get the most out of this approach.
This brings us to our next strategies.
Link building works well with content marketing — since you’ll be using offsite content posts to build those links. Guest posting on external websites (and hosting guest posts of your own) allows you to link back to your website’s best content, naturally.
Each link you build serves as a transmission route for new visitors. It also increases your “authority,” or trustworthiness, which can, in turn, boost your search engine rankings.
Again, this strategy is cheap (since you can write external guest posts on your own), it’s something anyone can learn how to do (or hire someone to do), it’s flexible, and it’s highly scalable. You’ll start off building links on local, small-time sources, and gradually work your way to bigger and more authoritative publishers.
Pay Per Click (PPC) Ads
Content marketing and link building are fantastic long-term strategies, but they take a while to get going. That’s why it’s valuable for new businesses to complement those tactics with pay-per-click (PPC) ads.
As the name suggests, PPC ads function like traditional digital ads, but you’ll only be responsible for paying for the people who actually click the ad. For example, if the cost per click (CPC) is $0.50 and you get 1,000 people to click the ad, you’ll only pay $500.
PPC ads are easy to set up and are practically guaranteed to generate traffic to your site, even if it’s brand new. Depending on which keywords you target, it can also be inexpensive. If you want to continue growing with PPC ads in the later stages of your company’s development, you can increase your budget and target keywords more aggressively.
Email marketing is possibly the least expensive and most accessible marketing strategy around. Why? Because it’s free to send emails, and you can write an effective email in just a few minutes.
Of course, making an email marketing strategy work for your company is more intensive than simply writing an email to an individual. You’ll need to decide whether to focus on warm or cold emails, design a drip campaign, produce effective designs, build a robust list of emails, automate sending, and track things like clicks and opens.
It’s a lot to take in at first, but it’s still an inexpensive, accessible, and flexible strategy that can continue helping your business grow until its later stages of development.
Don’t underestimate the power of referral marketing, especially as these other strategies begin to help you flesh out your initial customer base.
If you make a customer happy, they should be willing to praise and recommend your business to someone else they know. If even half your customers recommend your business to someone new, you can multiply your growth exponentially.
The trick is to give your customers a reason to refer your brand to others. Oftentimes, the most straightforward way to do this is to give them a direct incentive. For example, you can give them a permanent discount, a free product, or even a cash bonus for each new person they bring to your company.
The Prioritization of Customer Retention
Most of the strategies on this list prioritize customer acquisition, and rightly so. Customer acquisition is, as intuition tells you, the most effective way to grow your company. Without new customers, there’s no new revenue, and therefore no engine of growth to tap into.
But it’s also important to focus on customer retention as part of your growth strategy. If your customer churn rate is too high, it will render your customer acquisition practically useless; every new customer will just be replacing an old customer who left.
Even if your customer retention situation isn’t that extreme — customer turnover can immediately compromise the effectiveness of your strategy.
Boost Customer Retention
There are many ways to boost customer retention, such as improving your product, providing better customer service, and collecting feedback to see how you can better serve your customers in the future. The better you adapt to customer demands, and the higher your customer retention rate is, the easier it will be to grow.
Every business goes through a challenging period of initial growth – but this doesn’t have to be a death sentence. Understand the limitations of your early-stage growth potential and adapt, with a mix of different strategies and enough adaptability to continue evolving as needed.
Image Credit: anna nekrashevich; pexels
Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!