Guest post by Colette Grgic from BlueChilli
So you want to grow…
If you’ve resolved that 2015 is your year to grow your business, then you’re probably brainstorming like crazy now to find the best ways to do that. More marketing spend? A focus on referrals? Partnerships?
Whether you should grow your business to survive past just your own effort is a tough question faced by many solo entrepreneurs and small teams. Many of us want to build something that lasts, that continues creating wealth for our families, something that leaves a legacy. Despite the ability to have an international product and company from day one, very few companies actually manage to scale properly despite the fact that their products or services could easily accommodate that. And that’s even more prevalent in Australia. Why?
And now you’re faced with growth challenges…
#1 Size Matters
One reason why growth is hard down under is purely our size. Australia’s population currently hovers around 23 million people. By contrast, that’s 3Million people less than the population of Texas alone. Despite the internet’s ability to start companies that are global from day one, one of the biggest challenges is grouping and then serving customers as a cohesive unit, which in turn allows for a critical mass to build that will propel your business forward. While our small market is very wealthy, it does make getting a critical mass of users a very real challenge that every company needs to overcome.
#2 Access to growth capital
As a solo operator, a major challenge to scaling your business is that you can only grow as fast as your profit permits – regardless of whether you want to attempt bigger goals. So you need (more) money. Chances are you’ve already been using your savings to build your business, you might already have taken out a loan to do that too and your growth potential as a single operator might be too small for traditional investors to consider your proposal.
#3 Small operators are often overlooked and excluded
The above is especially important in Australia’s market where we have a relatively small consumer base and a handful of very successful corporations that span across and service a huge portion of that consumer base. Building a customer pipeline is essential regardless of the size of a company – but as a solo operator the number of channels you can explore for your pipeline is limited by the time and money you can input. Furthermore, some channels are only available or feasible at a larger scale so there are many marketing opportunities that unfortunately exclude small businesses.
Have you thought about a corporate partnership?
So let’s take a look at a very effective but seldom used growth channel to get to a critical mass. Let’s take a look at a (gasp!) corporate partnership and how you can leverage this channel by committing yourselves to one major customer who can advance you the cost of growth and help you scale your business.
Until recently large corporations have seen solo founders and early stage startups as too risky to engage with. Monumental corporate challenges like the Netflix Prize helped to remove that stigma; a whopping $1Million was awarded to a new and unknown startup. That sparked a whole new level of interest in corporates seeking out bright entrepreneurs and innovative startups to help them fuel innovation in their companies. A few years later, it’s finally catching on in Australia and bringing new opportunities to access funding and scaling opportunities.
BlueChilli is a startup incubator that works with entrepreneurs to turn their ideas into scalable businesses, and we’ve stepped up to bridge the divide between entrepreneurs and corporates through corporate innovation programs. We recently wrapped up the Westpac Innovation Challenge which awarded a $40,000 prize and the opportunity for Westpac to offer the winning product to their customers. December also marked the launch the Human Connections intake of the new Disrupt@Scale program, where four entrepreneurs (maybe you?) will be awarded a $75,000 investment each to develop their product over the next six months which further investment and scale opportunities from the corporate partner – a large financial institution in this case.
In both cases, great care was taken to set up programs that benefit the entrepreneurs and mitigate their growth challenges:
#1 Provides a density of customers
In all the programs we’ve been involved in the corporate partner is itching to provide innovative solutions to their staff and customers. In the case of Disrupt@Scale the corporate partner is one of the larget financial services organisations which has a presence in Australia, New Zealand, Asia, the UK and the USA. They have more than 35,000 staff and over 12 Million customers. Now, all businesses and products are different and you might only need a hundred high-worth customers to solve your growth challenge, but it’s a pretty significant advantage to be able to pick and choose which hundred of the 12 Million would be best!
#2 Access to capital
Growth most often requires financial resources, and as you’ve read and probably experienced, your options outside of revenue are limited. Corporate partners can provide a cash advance for a new product’s development (usually done to larger, established companies that have relationships with the corporate), or they can invest into an entrepreneur’s new venture. An investment from a corporate partner means that they have an interest in helping your business grow and succeed – unlike hackathons or cash prize competitions where the interests fades shortly after the winners are announced. And ultimately, it is the growth of your business that matters. It can be a challenge to keep your interests above the corporate’s, which is why the Disrupt@Scale program is run at arm’s length to make sure entrepreneurs retain autonomy. After all, that’s what you do best!
#3 Strategic support and brand leverage
Even with a relatively small $40,000 prize in the Westpac Innovation Challenge, the feedback from participants was extremely positive around the opportunities that the challenge presented to their business, with all the finalists establishing funding, mentorship or other partnership opportunities as a result of the challenge. In the Disrupt@Scale program you’ll be able to leverage the respected household brand name of the corporate partner and access marketing channels usually reserved for much bigger companies. You’ll also receive a six-month placement in the BlueChilli Accelerator to get step-by-step guidance on how to develop, grow and scale your business to benefit from all the additional customers.
When you seek out the right opportunity and framework for a corporate partnership it can have brilliant outcomes for your business. Exploring a program like Disrupt@Scale could very well be the thing that makes your 2015 the year to grow your business to the next level.