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The road from startup to market leader is a tremendously challenging one. Startups that manage to get their feet on the ground have a long way to go before they become a top player in an industry.
I spoke with the CEOs of three immensely innovative and successful industry-leading companies about how they grew their businesses. Here are their biggest tips:
Identify the mission
One of the most important steps when pushing to become a leading company in an industry is to create a clear mission and mantra, says Ryan Howard, founder and CEO of Practice Fusion, the top cloud-based electronic health record platform for doctors and patients.
To better brand the company, Practice Fusion changed its tagline from the abstract “collaborative healthcare solutions” to the concise and straightforward “free web-based electronic health records.” The identity of a growing startup should show how the business fits into its industry ecosystem.
“We spent a huge amount of time positioning our messaging and value propositions,” Howard says. “Every defined value proposition was in contrast to an existing product or company so we could differentiate ourselves clearly and establish our own strong identity.”
Just because the founders and team members understand the startup’s vision doesn’t mean that customers or investors grasp what the firm is all about.
“It’s about building something people care about,” and being able to communicate that, says Howard Lerman, co-founder and CEO of Yext, a leader in digital presence management software.
Market, market, market
“Once you have messaging, shout it from the rooftops,” Howard says. “Get your message out in scalable ways.”
With limited budget to devote to marketing, Howard focused on public relations over advertising.
“Most people don’t value PR because it’s hard to measure results in an isolated, controlled way,” he says. “In the beginning, we weren’t doing ads or other marketing efforts so our PR campaign was controlled experiment, and it turned out to be very foundational for us.”
Howard adds that he would cut marketing activities that didn’t show return on investment or were a grind on the team — such as trade shows — and focus on other marketing tactics.
Marketing is extremely crucial, but it is the easiest department in which companies burn through cash, so be careful and always monitor budget, Howard says.
Startups will constantly need to improve and iterate as they evolve and their industry advances.
“Tech companies must constantly reinvent themselves,” Lerman says. “Yext started doing paper call ads but transitioned to building the software that syncs the world’s local data.”
To differentiate from competitors, startups need to create a product or service that is difficult to replace and brings value, Lerman suggests.
“You’re never done. Build quick. Assemble a great team,” he says. “The biggest challenge is creating a company for the wrong reasons. Don’t start a company to make money, start it because you’re passionate about an idea or having a company.”
Although the direction of the company may change as it grows, there should be a continued theme or focus, says Lisa Marino, CEO of in-game video ad platform RockYou.
“If I knew how hard this would be when I started, I never would have touched it,” she says. “No one in their right mind would because the likelihood for success is so low while the costs personally and professionally are so high. But I’m proud to say we truly have a great comeback story that’s still being written.”
Despite the high stakes and hard work required, reaching the next tier of startup success is possible for those who refuse to give up.
“If you repeat something enough times, you will believe it and your team will believe it, too,” Howard says, “and then it can become reality.”