There is a certain mystique that is attached to the notion of growth. Sales growth is seen as elusive and unpredictable, but is it really? I have a close friend who recently closed his series A funding for a B2B product. He already has some revenue and wants to grow 3x in the next 12 months. When I asked him about how he plans to get there – his response was somewhat in these lines, “I plan to hire smart people, create a stellar sales team and believe they’ll do all the right things that will lead us to 3x growth in revenue.”
The same entrepreneur responded very differently when asked about recruitment and product plans. He knew exactly how many people he would hire, how much office space is required, how many servers they will need and which technology platforms they will use without an iota of doubt. Even the culture and organizational behavior that he wants to design was somewhat intentional and yet somehow growth was not seen that same way.
Growth is perceived as this magical phenomenon that simply happens under the right circumstances. It’s a misty-eyed, romantic notion that disavows the true nature of growth. A savvy entrepreneur might say, “Get the right ingredients in place and growth will happen.” Think about it – for a manufacturer, an increase in manufacturing capacity is simply a function of resource and time. For an engineer, building a complex system is simply a function of resource and time. For a recruiter, hiring a large team is yet again a function of resource and time. Could business growth also be a function of resource and time?
The engineer in me is partial towards deterministic thinking and repeatable processes. Could growth be predictable and repeatable instead of showing up in the rear view mirror and visible only in hindsight?
I believe there’s a market for ‘almost’ every product – large or small. Remember those 56kbps dial up modems? Turns out AOL (now Verizon) has 2.1 million customers paying $20/month for dial up internet in 2015. Consider the increasingly irrelevant fax machine – turns out over a millions of those units were sold just last year. Go figure – but the point is that there is often a market for the quirkiest of products and services. With the right insights and data, one can identify such buyers and unlock these niche markets. At the end of the day, growth is all about identifying the right product-market fit and then undergoing the process of ‘increase-and-expand’ either in the identified segment or into new segments or channels.
Identifying the optimal product/market fit is difficult to achieve. It is an abstract concept and a multi-dimensional search problem that spans across the entire universe of buyers. First, it is not easy to identify the best market fit for a product; second, even if you achieve a good fit it is difficult to quantitatively measure, rank or compare; third the market and the competition is constantly evolving – so even if you get lucky and identify a good fit, you could lose it in no time. The product/market fit pursued by a company is oftentimes a gut feeling of the CEO or an opportunistic decision by the VP of Sales. It’s easy to fall into the trap of seeking revenues instead of successful market segments. Early adoption and revenues don’t always lead to the best product-market fits.
To identify the best fit, a thoughtful and iterative process is crucial. Complete with a system of record that keeps track of all the product/market fit experiments run so far, ranks the best ones over time, and recommends additional experiments for the sales team. In the end, this process should rank the best markets for a given product optimized by market size, penetration, fit and overall opportunity.
We are headed into a world with innumerable tools and accurate data on B2B buyers. Mining such data to systematically go through product/market fit experiments will soon become a reality. I suspect that growth teams will play an active role in identifying and tracking the optimal market fits. Once you lock in a market segment with a high fit, the next step is relatively easy and involves building scale which most sales teams are good at.
To conclude, the magic of growth is anything but a serendipitous phenomenon. The planning, execution and predictability of growth are at the fingertips of those who acknowledge its full potential and understand the variables involved. Even without proper tools, there’s enough data and good practices out there for companies or individuals to embark on a process of predictable growth.
Santosh Sharan is the Vice President of Growth & Strategy at ZoomInfo. In this role, he drives business growth through continuous improvements, growth hacking and deep analytics.