Scale
Looking to open a new location, expand your product or service offering, or growth through acquisition, we have the experience and network to expedite your process. Scale Up Your Business“I like the impossible. There, the competition is smaller.”
Congratulations, you’ve established a growing business and are looking to spread your wings and expand your footprint!
This is where our expertise in business development can help you get to that next level. Whether you’re looking to open a new location, expand your product or service offering, or grow through acquisition, we have the experience and network to expedite your process and identify that next corner puzzle piece.
How to Scale, Successfully
There are a lot of factors to consider when looking to expand. These, typically, can be clustered into four primary categories depending on objective:
Geography
Grow your footprint.
Segment
Expand your offering
Sales
Diversify your channels.
Target
Grow through acquisition.
Everybody Has a Plan Until They Get Punched in the Face
To understand the opportunity best aligned with your needs, start by answering these three questions:
1. What is your definition of success?
2. Are you looking to go wider or deeper?
3. What could prevent you from achieving your vision (barriers and constraints)?
Relevant factors to consider when defining success should include growth objectives (as % of $), investment cap, and hurdle rate.
When deciding if you should go wider or deeper, typically, it is significantly easier and cheaper to sell more to existing customers. If you believe you have saturated opportunities with your existing customer base or the ROI to add a “tuck in” to your current product or service portfolio isn’t worth it, then going wider may be the best path for you. If that is the case, focus on the principle of 6 degrees of separation. Every step away from your “core” will be harder, more expensive, and take longer.Your success parameters, short- and long-term, must align accordingly.
Factors that could hinder your ability to achieve your vision are both controllable (e.g. your timeline, risk appetite, call point alignment, service requirements) and uncontrollable (e.g. problem magnitude, competitive landscape, IP risks, market trends).
Mike Tyson once said, “Everybody has a plan until they get punched in the face.” Business development should be viewed similarly. Nobody has a crystal ball and risk mitigation should be considered equally, if not greater than, the excitement of the potential upside. We will help you with this and have a proven track record of identifying forward-looking strategies and an expansive network to drive sustainable growth.
SCALING SERVICES
HR recruitment & retention
Job fit characteristic definition
Team and train-the-trainer workshops
M&A advisory service
IP Monetization
Fundraising
Market Expansion
Product Development
Fractional Leadership
Why Most Companies Whiff
Coming Soon!
Frequently Asked Questions
How can I recruit and retain the best talent during rapid growth?
Attracting and retaining the best talent, particularly during rapid growth, is an increasingly challenging problem. However, like the unnecessarily complicated marketing jargon outlined in our Build FAQs, this too is not rocket science.
First, recruiting and retention starts with corporate self awareness and clear communication. Just like in life, “over promising and under delivering” or like the young kids call it nowadays “catfishing” is a recipe for disaster.
Second, recruit people who fit the profile of your company and role. There are numerous, quantitative profiling tests that can be implemented very cost effectively to measure this “fit”. Even during rapid growth, don’t settle for “warm bodies”. They will cost you significantly more than being patient and finding the right fit. Such profiling tests should be step one in any hiring process.
Third, ensure the person or team overseeing your recruitment and retention program is actually trained in this field. Wearing multiple hats is required in most startups and small- / medium-sized businesses, and we love the acronym “FITFO” (figure it the f@#$ out). However, the ability to FITFO is dependent upon foundational knowledge. Multiple hats is not an excuse for not providing the toolkit necessary to do the job.
Successful recruitment and retention starts with corporate self awareness. Your process to hire during rapid growth should not be any different than hiring any other time. The direct and indirect cost of a bad hire is significantly greater than investing to find the right fit.
How can we mitigate risk in our M&A due diligence?
Studies suggest between 70-80% of acquisitions do not add shareholder value. Yep, you read that correctly! Even big-budgeted and well-staffed Fortune 500s fail more times than they succeed in M&A activities.
Why is this? The simple answer is everyone (in the north at least) says “I skate to where the puck is heading, not where it is.”, however, very few have the gumption to live this and process orientation to evaluate what a “good opportunity” looks like. On one hand, varying human biases (confirmation, self-serving, hindsight, illusion of control, etc.) suggest that many people, particularly powerful and successful, are a little too confident in their skills and abilities. On the other, those same people are often risk averse. The fear of failure is real. In 2002, Yahoo turned down acquiring Google for $1M. Yikes!
The output of this combination is, often, valuing an acquisition target based on historical growth, forecasting a similar “hockey stick” growth trajectory, but waiting too long to jump on the bandwagon.
Second, acquiring a company should be a diligent and methodical process exploring all facets of the fit and opportunity: sales and marketing alignment, service requirements, legal and regulatory risks, supply chain, etc. Nobody has a crystal ball, but digging deep enough and asking the right questions with sufficient stakeholders can significantly improve your ability to “read the tea leaves”.
Third, balancing passion with objectivity is critical. If you are not passionate about an opportunity, you, most likely, will struggle to rally the troops to gain the momentum necessary to drive an acquisition. However, if you are not objective about the risks and the timeframe for success, the sunk costs and potential disruption may sink the ship.
M&A is 1 part art and 12 parts science. Don’t fall in love too quickly or too hard. Be methodical, be diligent, be objective, understand your risk tolerance, set your hurdle rate, and define your target list accordingly.
Let’s share a K.I.S.S. WTF are you talking about?!
- Nike and golf = fail
- Walmart and Germany = fail
- Virgin and cola = fail
- Google and social media = fail
- McDonald’s and salads = fail – (extension market research costing millions of dollars validated that people go to McDonald’s for burgers and fries!)
- IKEA and global domination = success
- McDonald’s and Redbox = success
- Arby’s and the meats = success
- Sofi and diversified financial services = success
- Netflix and streaming = success
See any patterns here? Neither do we 😂!
But these examples do provoke a few observations about elements of success (and failure). Let’s share a K.I.S.S. (keep it simple stupid).
- Have a clear understanding of what your true source of competitive advantage is and how it aligns with a complementary or adjacent market.
- Never underestimate the power of a leader (especially one with 50%+ market share).
- Leverage new brands to test new ideas.
- Understand the difference between deeper, wider, and upstream movement.
- Proper preparation (and a little bit of humility for that matter) prevents poor performance.
- Keep your head on a swivel.
For example:
McDonald’s original core competency was the advantages it gained by standardizing the burger and fry market. We believe its modern competitive advantage has evolved into becoming a nostalgic piece of Americana. Hopping on the health kick bandwagon seems logical, but we would argue memories aren’t made with a salad in a kid’s meal.
Google, King of Search. Sure why not become King of Social. Because Google’s core competency is to connect people to information. Connecting people to people is significantly different. Facebook is also pretty strong opposition that Google, seemingly, underestimated.
Blockbuster and Kodak owned their respective markets in their prime. However, they also dug their heels into the business-model equivalent of phone book advertising. This complacency allowed more intune disruptors and competitors such as Redbox, Netflix, Nikon, and Canon to better position themselves for future success.
Lastly, Walmart failing in Germany feels like it could have been prevented with a long-weekend research trip and a few beers at the local pub to gauge Germans’ interest in a gigantic, hot-box, all-in-one shop where cost > quality and has a history of poor vendor relations.
Market expansion, typically, takes long and is harder than anticipated. You can be both bullish and realistic about a new opportunity. Deliberately working through the above observations with “intellectual honesty” could be the difference between success and failure.