If only I could start again with what I know now.Every startup founder ever
This article originally appeared on the Voyager HQ blog, written by Anastasiia Semykina. After 4 years of connecting travel industry startup founders, investors and innovators in 430 cities throughout 80 countries, Voyager HQ announced it’s closing on April 15, 2020 due to to COVID-19. Article is shared here in it’s original format.
At a recent Lunch & Learn at Voyager HQ, Grabr’s head of traveler growth Christina Leigh Morgan offered an honest look back at the lessons learned through the startup’s rapid rise and hyper-growth trajectory. We found it so helpful that we thought it would be a great idea to share a recap from the session in our Weekend Reads blog schedule, so that Voyagers who didn’t have a chance to attend the session in person can still hear the takeaways.
Here’s our take on the ten lessons in hyper-growth from Christina:
LESSON #1: DATA MATTERS FROM DAY ONE
From idea to IPO, data is the single most important thing you need for decision making! Your data infrastructure is the foundation that you will build the rest of your company on. So it’s extremely important to consider your data needs from day one and make a plan for how data flows across systems, how it’s stored, and what you’ll do to accommodate your growing needs.
That last bit is telling: you must be prepared for success. While it’s true that many startups fail, the reason isn’t always a lack of demand. Often, a startup will find product-market fit but is unable to stand up the infrastructure necessary to support the scale. That’s a painful position to be in, because you’ll end up spending money and time at a critical juncture in your startup’s life.
At the very beginning, set your marketing stack up to be as close as possible to providing one single source of truth. As a startup scales, the tech stack only gets more complex. Since it’s much harder to untangle later, set it up correctly at the beginning. That way your data will be as clean, accurate, and reliable as possible.
LESSON #2: IT’S ALL ABOUT THE PEOPLE
For startups, it’s all about the people. Of course that’s true for all businesses. But it’s especially the case in the fragile early days of a startup, when each new hire has an outsized impact on culture, productivity, traction, and overall trajectory. A single bad hire can derail everything.
HIRING. It’s naive to think that you’ll always get it right, but you have to at least give hiring the attention it deserves. Always be prospecting so that there’s a bench of warm talent to support growth. The most important quality is to hire people who not only share your goals but who can contribute to defining and narrowing those goals. Focus equals growth!
ONBOARDING. In the fast-paced and often-chaotic startup, on-boarding can feel like a chore. It’s tempting to give staff a laptop and logins, and let them get to work. Avoid that temptation! Take a weekend and create an onboarding process for each role…and maybe even a personal user guide that guides interactions between yourself and new hires. A framework aligns everyone to build company culture together.
DEVELOPMENT. Even in the early days, it’s a mistake to neglect your employees’ desire for professional development. Curious people make the best hires — and want not only actionable feedback but also to push themselves and learn new things. Keep the principle of abundance close: when you are generous with others they will be generous with you. This also means being honest and firing quickly and gracefully when it’s clear that it’s not the right fit.
LESSON #3: INVEST TODAY FOR DIVIDENDS TOMORROW
Time is the one thing that you have in abundance in the early days of your company. You’ll never have more time on your hands than you do right now. Take advantage of this and invest in the things that snowball and increase dividends over time.
A few examples of things that grow in value over time: seeding reviews, improving your search engine optimization, building out a referral program, and running incentivized social sharing campaigns. These investments are time-heavy and relatively low-cost, and can make your business stronger over the long-term. Focus your efforts on these types of things!
LESSON #4: OPERATIONALIZE YOUR FEEDBACK LOOPS
Feedback loops are valuable resources for any company. In the beginning, feedback loops can mean the difference between life and death. After all, when you’re still struggling to find product-market fit, and you’re not getting the insights you need to improve your product or find the right audience, your chances of success are slim.
Examples of feedback loops include from your customers to your team, from your data to your team, from your team to each other, and from your team to your customers. To nurture these loops, always have an all-hands retrospective after big collaborative projects, and schedule regular check-ins with early adopters who can give you honest feedback. These early adopters are taking the journey with you and should be treated as the valuable resources they are! You’ll know your best customers and be able to find more like them.
LESSON #5: PRIORITIZE SPEED AND EXPERIMENTATION
Speed and experimentation should be second nature. Speed is your top competitive advantage, because you’ll be a fierce competitor if you can move faster than competitors while still executing well.
To stay in peak fighting shape, you’ll also need to foster a culture of experimentation. As you test and learn, you can figure out what works and then double down. The formula here is: experiment, iterate, automate, repeat. As each successful experiment is folded into your operation, you’ll be stronger and more resilient.
LESSON #6: RETENTION ABOVE ALL ELSE
Customer acquisition costs (CAC) drain precious resources from your startup — and can be a startup killer. Expand your focus to retention marketing and do whatever you can to retain existing customers. Strong retention prevents leakage to competitors and increases your brand’s staying power over time. It’s also up to 7 times cheaper to keep customers that you already have then finding new ones.
Travel app customer acquisition costs, per Liftoff research. Each new purchase from an existing customer offers significant savings from the $42 per purchase from a new customer.
Retention tracking also ties back to the first point above about your data infrastructure. You need to have the right structures in place to provide precise customer acquisition costs and retention rates. Without that information, you’re effectively flying blind. And, even worse, if that information is inaccurate due to poor data management practices, you may be flying in the wrong direction.
LESSON #7: IT’S NEVER TOO EARLY TO START BRAND MARKETING
Your brand is a powerful tool of recognition, emotion, and storytelling. It signals what you stand for, and becomes a catch-all for consumer perceptions. How consumers perceive your brand influences how they interact with your company, and those perceptions then influence purchasing decisions. Since brand equity builds over time, it’s an extremely valuable competitive advantage that discourages new entrants and relegates existing competitors to second place.
Brand awareness is a key driver across McKinsey’s Consumer Buying Journey.
To build your brand, prioritize these three themes:
- Visibility. Get out and be seen in your industry’s ecosystem. Attend events, launch a company blog, go on podcasts. Visibility builds authority, which is always helpful pillar in a brand story.
- Reputation. Delighting your customers with a personal touch builds a strong reputation and encourages word-of-mouth marketing. That also means recovering from mistakes and winning fans wherever you can.
- Documentation. It’s never too early to document your brand voice and outline what your brand stands for, how it speaks, and who it speaks to. Share this with all new employees to begin building a common voice.
LESSON #8: REVENUE IS SEXIER THAN GROWTH
Revenue is a cure-all. Sustainable revenue will always be sexier than costly growth that’s hard to sustain long-term. The fundamental problems with unsustainable growth have come into focus with the ongoing WeWork saga, resulting in SoftBank’s pivot to cash over growth, as well as other stories such as Uber’s well-documented struggles to profitability amidst a poor IPO performance.
Another benefit from revenue: When it comes to your customers, you can also learn so much more from revenue than from growth. While growth is all about optimizing your CAC and building demand, revenue balances attracting new customers with retaining existing ones. This balanced approach yields better results in the long term — especially in the face of any economic headwinds and a reduction in investors’ appetite for risk.
LESSON #9: MANAGE ENERGY NOT TIME
Capitalism was built on time. It’s all about the unit economics: increase the efficiency on the factory floor to make more money; increase productivity in the office to get more out of the same human resources.
Bootstrapping is worthwhile. Sustainability is cool. The key to success is managing energy, not time. Burnout is very real and you need to remember that this is a marathon not a sprint. So adjust your own energy accordingly, and encourage your team to do the same.
Energy is a finite resource that must be allocated carefully according to priorities. It’s your job as the founder to narrow the focus that sets everyone else up for success. You should always be able to boil your business down to the three metrics that matter most — and have everyone on your team know them and be able to repeat them. With this focus, you can deliver the product, people, and process that fuel success.
LESSON #10: BUILD YOUR COMMUNITY AND PLAY A LONG GAME
Just like your brand isn’t built overnight, neither will the community built around your brand. You’ll need a strong brand that resonates clearly and strongly with a narrow slice of people that become fierce advocates. These brand advocates are arguably the most important in the early days of your brand, as they are free resources dispersed in places that you cannot reach on your own.
So, even in the early days, build a place for these people to hang out. Or, at the very least, create a recognition program to identify key ambassadors and incentivize them to share your brand more widely. You’ll get an outsized return on your time and financial investment; it’s one of those things you can do now that delivers ongoing dividends (point # 3 above).
Community also exists in your chosen industry. Stay up-to-date with the latest news, network with like-minded professionals, and look ahead to where your company is heading so that you can find mentors and advice about the challenges ahead.
Founded in 2015 by Artem Fedyaev and Daria Rebenok, Grabr is a P2P marketplace that helps shoppers get products from abroad, with the help of a traveler. Travelers purchase the requested product, travel and deliver it in person — and then get paid a reimbursement plus delivery reward by Grabr. Grabr’s global community has more than 1 million registered users, with travelers earning $5 million USD to date for deliveries in 75 countries and counting.