With seemingly more and more workers breaking free from the chains of the corporate world to embark on their own business journey, seeking a better life quality and meaningfulness, we’re asking whether those startups are here to stay… or whether they will be very short lived idealisms.
Building your own business is arguably more of an option for people more than ever; particularly with the ongoing opportunities that come with the evolution of social media, online networking and ecommerce.
However, a business dream can soon become a nightmare. Perhaps startup founders get into their business building for the wrong reasons, or underestimate the hardships they are bound to face and that’s what leads to a failure down the line. On the other hand, a person’s mix of passion, knowledge and experience and their drive to dictate their own lifestyle and future, might just be the perfect recipe for startup success.
Among the increasing number of startups, what does it take for them to stick around? How do these startups take themselves from small to big with successful growth?
In our forum today we have the opinions of James Gilbert, Director APAC at HubSpot and Jeremy Liddle, Chief Revenue Officer at SingularityU.
James Gilbert, Director APAC, HubSpot
It’s never been easier to start a business, but it’s never been harder to scale one. When you’re growing a business, two numbers matter more than anything else:
1) How much it costs to acquire a new customer (CAC)
2) That customer’s lifetime value — how much they’ll spend with you over their lifetime (LTV)
Customer acquisition costs (CAC) have been steadily rising for B2B and B2C companies. Over the last five or so years, overall CAC has risen almost 50% — and while paid CAC is still higher than content marketing (organic) CAC, organic costs are rising at a faster rate. Most businesses focus on lowering CAC. Inbound marketing made this pretty easy, but it’s getting harder as the likes of Facebook and Google make it harder to acquire customers organically (i.e. without large advertising budgets to supplement your organic strategy). The big opportunity for today’s startups is twofold:
1) Raising the lifetime value of their existing customers
2) Turning their customers into brand advocates
When you have a base of successful customers who are willing and able to spread the good word about your business, you create a virtuous cycle. Happy customers transform your business from a funnel-based go-to-market strategy into a flywheel. Through promoting your brand, they’re supplementing your in-house acquisition efforts. This creates a flywheel where post-sale investments like customer service actually feed “top of the funnel” activities.
The happier your customers, the more willing they are to promote your brand, the faster your flywheel spins, and the faster your business grows. Not only is this the right thing to do by your customers, it’s the financially savvy thing to do for your business. It’s a win-win-win. At HubSpot, that’s what we refer to as ‘growing better’.
Jeremy Liddle, Chief Revenue Officer, SingularityU Summit Australia
Many people thought it was ridiculous that Amazon lost money for over 10 years. Now it is valued at US $915bn and is one of the most valuable companies in the world.
Uber was touted as overvalued by many skeptics through almost every round of private funding. Whilst the IPO didn’t shoot the lights out, their market cap still stands at US $69bn and many investors have made astronomical returns.
Many skeptics thought Canva was overvalued when it raised it’s second and third rounds of capital. They thought the same when it became Australia’s newly minted unicorn, valued at $1bn and still private, because of the insane revenue multiple required to calculate a price-revenue based valuation. Just this week Canva has been revalued at US $2.5bn based on another fresh round of funding and, once again, investors are on track to make huge returns.
Whilst the vast majority of startups will inevitably fail, the unicorns, decacorns, and global statistics point to the fact that enough of these companies are surviving and thriving to build new industries and drive humanity forward.
I don’t think there is any single next big game changer – because tech is changing all the time.
However, the themes of AI coupled with secure electronic ledgers (blockchain) as part of larger interconnected, unmanned systems provide very different challenges for creating and engineering positive and ethical customer experiences. The opportunities are for businesses to think as far forward as they can, and see how they can integrate new technology, new thinking and new experiences to fuel their marketing, strategy development and business growth.
Our business is about measuring the ROI on digital marketing with the customer at the heart of all we do. We measure their interaction with content across multiple platforms. With the likely movement of technology we will pursue adding the engagement and digital footprint of “things”. Still one view of the customer – but who, where, how they engage. Exciting times ahead for all!