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Start-ups are useful contributors to the economy as a whole. Research has shown that the innovative fast growing start-ups- the gazelles – are almost the sole contributors of new jobs in advanced economies like the US. However, the world of start-ups, is full of challenges, and sustainability and longevity through are often rewards for grit, determination and hard work. What is generally obvious is the challenge of fast growth- but what is not obvious is the benefits of being a growth – oriented start-up. While start-up entrepreneurs have very little control over the context in which they operate and thrive, there definitely exists scope for them to develop a perspective that enables them to expand their vision, seek out opportunities for growth and channelize their energies in realizing growth through efficient management.
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©K.KUMAR
Making Growth Happen
Prof. K. Kumar4 Startups
02 February 2013
©K.KUMAR
Does Growth Just Happen?
• Growth can happen when you are in the right industry at the right time…
But• Growth often happens more due to the
perseverance and foresight of entrepreneurs
• Eight questions to answer if you were to make growth happen
©K.KUMAR
Question 1: Do you aspire to grow?
• Aspirations and preferences• Financial goals and wealth targets• Stakeholder expectations • Team and family influences
©K.KUMAR
Question 2: Does your business have growth in its DNA?
• Growth Oriented Businesses– Revolutionary Businesses– Propagatory Businesses– Speculative Businesses
• Lifestyle Businesses– Niche Businesses– Hustle Businesses
• Can lifestyle businesses be turned into high growth businesses?
• Do you have growth facilitating portfolio?
©K.KUMAR
Question 3: Have you figured out your growth stoppers?
• Market opportunities• Capital• Sustainable strategy• Human Resources• (Your own) Transition from startup
entrepreneur to business leader
Question 4: Have you identified market opportunities to spur growth?
• Existing products to existing customers• New customers• New products and services• New delivery approaches• New geographies• New industry structure (forward or backward
integration)• New competitive arenas (new businesses)
©K.KUMAR
Source: Baghai et. al. “The Alchemy of Growth” Texere Publishing,2000
©K.KUMAR
Question 5: Are you positioned to access financial capital for growth?
• Debt – Increases the fixed costs– Raises the risk profile
• Equity– Dilution of control– Visibility and public scrutiny– Shareholder expectations
©K.KUMAR
Question 5: Are you positioned to access capital for growth?
• Worldview and Mindset • Business and company structure• Past business performance and track record• Credibility and reputation in financial circles• Current performance and cash flow• Predictability of future performance
©K.KUMAR
Question 6: Have you have figured out how to sustain growth?
• Exploiting continuous learning– To control and reduce costs – Continuously refreshing the offers to customers
• Not pricing for maximum profits• Scaling up through outsourcing• Continuously accessing new markets
©K.KUMAR
Question 7: Do you have the right people to grow the business?
• Shared vision– Leveraging Expertise – Building commitment
• Culture and style– Transparency and meritocracy – Celebrating success and tolerating failures
• Motivations and rewards – Sharing of wealth and credit
©K.KUMAR
Question 8: How (personally) prepared are you to manage growth?
• Systems to anticipate, act and review• Raising focus from managing content to
manage behavior, results and context• Delegation and monitoring– Underplaying the capacity to work– Overcoming the desire or need for control
©K.KUMAR
Thank You
Any Questions?
