There is a lingering idea among business leaders that growth is and should be limitless. It's as if the economy of scale has no ceiling, no curve and no saturation point, and all growth drives proportionate cost savings, operational efficiencies and technological improvements.
This, of course, is not always true, yet many companies are loath to acknowledge limits for fear of being deemed unambitious. Things like research and development timelines, talent shortages, data storage costs, sales, support demands and software expenses can all conspire to cap growth and expansion beyond which a company can no longer claim savings of scale.
For example, it makes logical sense that a company shouldn't go after more customers until it can satisfy and accommodate the ones it already has. But so many industries — tech in particular — have been thrown out of whack by initial public offerings (IPOs), venture capital (VC) rounds and a general "follow the herd" mentality among CEOs that makes following this rule difficult.
In 2020, the entire world is dealing with unprecedented levels of flux and anxiety about the future. Still, that doesn't mean that companies or leadership are going to give up on their pre-COVID-19 goals. There are so many ways to grow responsibly, sync with demand and sustain momentum.
Here are five tips for growing your business responsibly.
1. Avoid Sinking Money Into Unnecessary Software
One common myth is that without a large customer base, annual revenue or capital investment, a company cannot commit the funds or the time it needs to build out its own sophisticated software solutions. Businesses then get pressured into making sticky contracts with vendors that promise short go-to-market times, infrastructure to scale and comprehensive tech support. Many businesses may find that these vendors fall short on delivering all that was promised.
2. Bring Engineering In-House When Possible
Many mid-sized and enterprise businesses can build out in-house solutions themselves without a huge time or talent investment. You don't necessarily need a dedicated software engineer on staff to create them. What's more, bringing engineering in-house allows you to tailor your solutions to your company's particular industry vertical. With commitment and foresight, you can create homespun tools across an entire software suite.
3. Grow Your Talent; Don't Buy It
Another common misconception is that top talent is bought and not developed. It's true that if a software company is looking for a decorated full-stack developer in today's market, that salary may exceed the value the position adds to a company — especially for smaller businesses. Consider hiring young and perhaps inexperienced people that can grow along with your company. If you take a chance on someone and grow their skills in-house and with patience, you may find that that person will stay with the company longer and provide more value than a new higher-level recruit. Also, be realistic about what prior knowledge is actually necessary for a given job. In many cases, certain positions may be better served by a young person without a four-year degree than a person with a Ph.D.
4. Think Hard About Whether You Really Need The Public Cloud
For small or new software companies, the public cloud can seem like the only option to scale. This misconception is born out of the idea that lightning-fast growth is the only way to compete in today's market. Over time, the companies that invest in their own technology stack and data centers are often the ones that create real savings. In fact, companies I've spoken to that had previously relied on the public cloud are slowly moving onto their own servers and discovering huge financial and operational advantages.
5. Help Customers Help Themselves
Any growing business understands that customer support needs to expand on pace with its user base. That said, there are more ways to offer support than just hiring support agents. Events like customer meet-ups and free training sessions are high-value, low-investment actions that can help companies meet customer demand, foster community and increase brand visibility. Thorough documentation that's available in multiple languages can also alleviate the strain put on customer support agents. Building out a comprehensive software support network takes time and generally works best for companies that favor sustainable growth and long-term success rather than immediate market penetration and ambitious growth projections.
There's a lot to consider when it comes to running and expanding a business, especially when crises and uncertainty swirl around us. That makes it even more important for CEOs and leaders to think critically about the potential benefits and drawbacks of the "always be growing" mindset.
