How Service Startups Unlock Higher Growth Without Funding
Last week, I got a question from a service company founder asking how to evolve her daily grind of a business to run more like a high-growth startup without pouring a ton of money into technology and marketing.
Not every entrepreneur has access to startup capital. In fact, the vast majority of startups are born well outside of established innovation hubs like Silicon Valley and New York, and might not have access to any sort of support structure whatsoever.
These days, a small service business can become high-growth business without a lot of up-front investment. Here are four ways I’ve experienced the low-growth to high-growth transformation, either with my own startups, those I’ve advised, or those I’ve worked for.
Automate a service or put automation around it
Two of the startups I advise are transforming the way businesses hire. One is already funded, the other is bootstrapping.
Both startups are helmed by former staffing company leaders who saw massive opportunities in the shifting needs of the modern workforce. As their experience increasingly told them that the old ways of hiring were too slow, too manual, and were producing diminishing results, they both turned to automation to add speed, remove friction, and provide better results at a fraction of head count, time spent, and costs.
This still takes time and money. Technology is still expensive, old habits can be hard to break, and there will always be one or more incumbents trying to crush you. The solution here is to use your existing service income to fund change instead of using it to compete against the incumbents at their own game.
Create a subscription product
Recurring revenue is a coveted alternative to the “feast-or-famine” periods that are always associated with service work. It can also help smooth out spiky customer demand, which in turn allows your company to scale, and thus results in the higher valuations associated with product companies.