Written for EO by Dave Pributsky, cofounder of 2920 Sleep
One day, a hare was making fun of a tortoise for being so slow.
“Do you ever get anywhere?” the hare asked with a mocking laugh.
“Yes,” the tortoise replied, “and I’ll get there sooner than you think. I’ll run you a race and prove it.”
No, this isn’t storytime for entrepreneurs. At some time in our lives, we’ve heard the tale of “The Tortoise and the Hare.” This classic fable teaches us that the race does not always go to the fastest.
Rapid growth and market dominance might seem great in the business world, but they are not goals that every company—or every leader—should chase blindly. Sometimes it’s better to start slow and truly understand your market before shifting into rapid-growth mode.
Lessons From the Throne
While we rightly celebrate the Amazons, Apples, and Googles of the world for their tremendous success, let’s not forget about the many promising companies that flew too close to the sun too quickly.
Remember Pets.com? The online pet food and supply retailer raised hundreds of millions of dollars from investors before ultimately closing up shop because it ran out of money. Investors expected the dot-com startup to rapidly grow its customer base to generate revenue, but it ended up running things into the ground because of an overly aggressive approach.
Need more proof that rapid growth isn’t all that it seems? Researchers found that many of the companies that appeared on the Inc. 5000—a list of the fastest-growing private companies in America—were not doing so well five to eight years after the accolade. In fact, two-thirds of those organizations had either shut down, become smaller over time, or been sold off.
While meteoric success might seem like a dream scenario for founders and early-stage entrepreneurs, there are clearly some drawbacks.
When Less Is More
In many cases, the healthiest path for a company might not be to “grow as fast as possible.” I have been fortunate to work at both small private firms and a classic Silicon Beach unicorn with a successful billion-dollar IPO. I’ve been lucky to view success and failure on several different scales. What I’ve learned is that a growth-at-all-costs mindset might not always be the best approach.
A successful business leader needs to be aware of the cost of growth against company culture, the ability to sustain that growth, and the consequences growth might have on the executive team. Working with this type of leader is like having Phil Jackson or John Wooden as the coach. They know when to push, and they know when it’s time to ease up. I believe this wisdom works as well in large-scale business as it does on the basketball court—or in smaller businesses.
A slow-but-smart growth strategy can outperform both rapid-growth and zero-growth approaches. Here are a few ways to lead your team to sensible (not just sensational) growth:
1. Set your priorities.
When we were charting our path at 2920 Sleep, we took time to strategize our goals—both for the business and for ourselves personally. We wrote down what was important to us, and then we ranked our goals. This was crucial to ensure we balanced our business goals with our personal aspirations.
We all wanted to enjoy more quality time with our families, spend time outdoors and feel good about how we treated our business partners and customers. That meant we had to adjust some of our financial targets. For example, we made a commitment to allocate 1 percent of our revenues to environmental causes via 1 % for the Planet. When your goals and priorities are explicit, you can make more fulfilling choices about how you spend your time and money.
2. Align and communicate.
Priorities are great, but they can create friction if you do not share them with your organization’s stakeholders. Face-to-face meetings with key personnel to discuss these goals can lead to huge rewards. You might host informal lunch discussions or coffee talks to gauge whether employees have goals that mesh with your own.
One study found that 73 percent of employees who report working for a purpose-driven company are engaged. In other words, getting the right people to buy into the company’s strategies will benefit everyone involved.
3. Express your gratitude.
The best way to safeguard your company’s culture as it grows is by expressing gratitude. People need to know that you appreciate them. It’s easy to get swept up in the daily grind of business, but don’t forget to slow down and show gratitude when it is due. Every single day is an opportunity to make an impact—thank your staff, your suppliers, your contractors, and your customers on a regular basis to seize this opportunity.
There may come a time when you are ready to take over the world with your business. You might eventually be the king of your vertical, but you might not want to aim to get there overnight. With some careful planning and a little introspection, you can hopefully enjoy your journey without unnecessary growing pains.
Dave Pributsky is the head of marketing strategy and business development at 2920 Sleep. This customer-centric online retailer provides high-quality products that improve sleep quality and overall health with minimal environmental impact. Dave founded 2920 Sleep with his business partner, Karim O’Driscoll. Dave has experience leading business and digital strategy with consumer brands such as TrueCar, USAA, AAA, American Express, and Consumer Reports.
Categories: Best Practices FINANCES STARTUP