Define Your Company Growth Strategy (2 of 6)

As CEOs, we are often so focused on the day-to-day of building our businesses that we don’t invest enough time and attention into the longer term prospects for our companies. There will always be bumps in the road that we cannot foresee but most businesses follow relatively similar trajectories. The better we are predicting and navigating through those challenges that may arise, and just as importantly, positioning ourselves to be in propitious situations (i.e. right place, right time) for when changes do occur, the more likely we are to achieve our objectives.

A starting point in developing a proactive approach to your business is to map your company’s ecosystem and define a clear growth strategy.

In defining your company growth strategy, what market space do you operate in? In what ways can that market space be divided and conquered? What are your strengths and weaknesses in those respective segments of the market? What is the core segment in which you have the requisite differentiation to be able to claim and defend against any incursions from competitors? Once you dominate that segment, what are the next directions and steps that you can realistically expand into? And if you won’t be able to expand into them, can you set yourself up down the road as a very attractive acquisition candidate for others who may have taken those spaces but where it would be a negative ROI to try to win share from you in your space?

A good metaphor here is to own a plot of land and either be so good at generating positive returns from that land that you can buy up adjoining plots of land, or failing that, to sell out at a high price to the developer who really wants your piece of land in order to put up a very profitable new building.

Some tips for defining your strategy include:

  • Realistically assess your strengths and weaknesses
  • Map out your market down to individual segments that are sufficiently different from one another to each want their own solution
  • Determine where there is a sufficiently larger segment in which you have significant capabilities to deliver and a competitive advantage vs other companies in the market
  • Dominate your chosen segment
  • Identify the natural adjacencies and extensions from your core segment along a variety of different axes (e.g. vertical integration – closer to customer; vertical integration – closer to source; upmarket to SMB, mid-market or enterprise; downmarket to midmarket, SMB or consumer; ownership of incremental or synergistic data sources; international, etc.).
  • Prioritize /set your strategy/ your growth path based on attractiveness and ease of execution

Next section: T – Target List

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My name is Alexander Rink. Drawing upon over 20 years of experience growing early-stage companies, my team and I help CEOs and Boards of Directors of companies from $1M to $25M in revenues identify and resolve strategic and organizational challenges to accelerate their company’s growth in a capital efficient manner.

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