Let’s start with a big admission: I’ve neglected you… purposefully.
When we launched the ‘Been There, Done That’ series, I promised you regular insights into our business — and then I pulled the plug. It was a tough decision. Blog traffic was up 416% and the feedback on our content was extremely positive… but as you read on, I think you’ll understand why I did it. (Hint: focus is your friend!)
We were at a critical point in our business.
After growing the business a certain way for more than two years, we had hit a plateau. The strategies we were using weren’t scaling at the rate we needed in order to be confident in our growth curve.
We had launched in 29 markets and were very successful in generating a community of advocates across the U.S. and strong brand awareness. Our reputation was excelling, we were helping businesses find flexible space but customer growth was unpredictable and we weren’t accelerating as quickly as forecasted. As a team of 15 running on a tight budget, split across all 29 markets, our efforts to change that were strained and diluted to say the least.
After digging deep on the problem, we identified our ratio of people and budget, to the ground we were trying to cover, was off. So we adjusted our strategy, but probably not in the way you’d assume.
Giving up on growth wasn’t an option so we held our targets steady. But rather than hiring and fundraising to tackle the broader ground, we chose to do a lot more of less… and I’ll walk you through exactly what I mean by that.
Our first step was to address our missed opportunities.
A big chunk of the interest we were working so hard to dredge up was falling through the cracks. We were missing the opportunity to help businesses with a genuine need for flexible space. Many were companies who had already started their journey with PivotDesk. They knew who we were, liked us, trusted us, and some had communicated a need for office space that we were fully equipped to solve. (This flow sound familiar? See Duct Tape Marketing’s post on The Marketing Hourglass.) But our product was not mature enough to handle them and since our resources were diluted, they weren’t getting the attention they deserved. It was clear this was an area that needed our attention, so we set out to serve those who needed us most.
In order to do that effectively, we had to rally the team on our new focus, which, of course, meant giving up some of the other things we had been working on (like our Been There, Done That series), even if only temporarily.
Next, we narrowed down our markets in order to magnify our impact. We did this by looking at where our opportunities were most prevalent and most valuable. And here’s what we saw:
1. 31% of our organic inbound leads were located in NYC
2. Our deal size was 7.5% higher in NYC than our national average
It became very clear that there was enough volume and value in NYC that we could focus on that market (supported with light activity in SF) and still hit our revenue targets. We’d have to risk sales slowing in the rest of our markets but we took that risk in order to prove the following hypothesis:
15 people serving 1 market would produce more revenue than 15 people spread across 29 markets.
So we bet our business and scaled back to a single market. We refocused product development, marketing budget, biz dev, PR and sales to NYC, and I won’t lie… my stomach sank and I was flooded with anxiety as a result! I knew this meant leaving opportunity on the table but the only way to help more businesses longterm was to devote our attention to only a portion of them for right now.
My team remained confident in our market data and our ability to tackle the challenge so we charged forward.
From there, we looked at optimizing our ability to close business.
There were holes in our system — both in our offline conversions and those that were processing organically within our product. We knew that optimizing the product would take time we didn’t have, so while we revamped the roadmap, we inserted people to handle existing opportunities. (Do things that don’t scale!)
We needed to study our customers, their buying cycle and our market of focus, and we needed do that on a human level to start.
To ensure the effectiveness of those people, we added process. We combined marketing (previously focused on PR/Brand) and our in-market sales team to create one Business Team that rallied around a central goal: revenue. Each group within that team was responsible for a stage of our conversion funnel.
Prospects / Leads → Qualified Opportunities → Closed business
Outbound / Marketing → Inbound → Account Executives
(Check out Aaron Ross’ Predictable Revenue – and look out for specifics on how we leveraged his sales approach in upcoming posts.)
This structure meant we would do two things:
1. “Handhold” our audience through the buying process
2. Segment our conversion strategy into stages and focus individuals on a single stage
It was this decision that had the greatest impact.
First, we saw revenue accelerate. We lost less people through the cracks in our system and closed more business at a faster rate. Here’s a look at our immediate results:
In Q1 2015, we sold 57.8% of our total sales in 2014.
Q1 2015 as compared to Q1 2014:
– 300% growth in # of bookings from Q115 compared to Q114
– 367% sales growth in $ value of bookings from Q115 compared to Q114
Q1 2015 sequentially over Q4 2014:
– 114% growth in # of bookings
– 306% sales growth in $ value of bookings
Was the approach we had in place completely scalable? No. But we knew that going in. At the time, it was more important that we had the bones for a solid conversion flow… flexible enough to optimize for scalability. This way, the more we learned about the market, the more our approach could adapt – and it did. (More on how we evolved this approach into a scalable strategy in future posts.)
Second, our revenue became much more predictable. ← This was by far our biggest win!
For the first time, we could effectively forecast revenue – which meant we were in control.
As a result, we developed a newfound sense of stability for the business. Did we have to work our butts off to see revenue continue to increase? Of course. But there was security in the fact that we knew if we drove X number of prospects from X source, we would convert X% into revenue over a 30-60 day period. And that security was resounding. Our team felt more secure, our board was better equipped to evaluate our efforts and that annoying little voice in my head was quieted (a little bit).
We had graduated from a stage where scrambling to close business of any kind was a win, to a more structured approach that multiplied our efforts without increasing our resource investment. As a result, we escaped the plateau.
Plateaus are normal and to be expected. Contrary to popular belief, they signify progress. Smooth growth curves don’t exist at this stage. It’s the decisions you make and what you choose to focus on (no matter how extreme) to get from one plateau to the next that are make or break.
For us, it took saying NO to hundreds of things we could be doing. It took saying YES to a few things that would make the most impact…. and on my end… it took the ability to stomach one huge calculated risk.
If you subscribe to the ‘Do More Faster’ mantra so ingrained in many startups by startup accelerators like Techstars, remember that there’s some subtlety to that phrase that is easily missed.
Doing more faster, or getting everything done, is usually more about depth than it is about width.
Focus is your friend.
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