When you sit down to think about growing your business, how do you get started? In other words, what are the first few questions you ask yourself to get your brain engaged?
If you’re like most business owners and/or entrepreneurs, chances are you start by asking questions like
- How much did we grow last year?
- What do we think we can do this year?
- What are other businesses in our industry doing?
- What’s a reasonable growth rate?
- If we really went all out, how much could we grow this year? Etc.
Now, it’s not that any of those are bad questions, it’s that they don’t lead you to come up with innovative 10X ideas. They don’t push you to think in completely new and different ways. They don’t lead you to the kind of thinking that can propel your business to an accelerated/exponential growth rate.
So, what kinds of questions could change the conversation? I think the answer is hidden in the title of this post, “How can we 10X our business?” Or, “What would our business look like if we were 10X our current size?” Or, “What would be different if we were 10X our size?”
This kind of 10X question means that if you’re currently running $300K, you’re thinking about running a $3M business. If you’re running a $3M business, you’re thinking about running a $30M business. And if you’re currently running a $30M business, you should be thinking about running a $300M business, which is a completely different animal.
You see, the beauty of asking the 10X question is that it completely changes the conversation. If you’re simply thinking about growing your business by 10% or 20% (or even 50%), you’re still thinking about what you’re currently doing and how you can do that “a little bit better.”
However, the moment you ask the 10X question, you immediately have to engage a different part of your brain. You’re not asking tactical questions like, “What if we increased our ad spend by 30%?” Or, “If we improved our upsell percentage by 20%, what would that mean?” No, you’re asking a completely different set of questions because you can’t 10X your business by doing what you’re currently doing, just a little bit better, faster and/or cheaper.
Once you start asking the 10X question and you start getting an idea of what your company might look like at a 10X size (i.e. instead of running a $3M business, you’re imagining yourself leading a $30M business), you’ll want to start asking some better follow up questions. And to help you think through what those might be, let me share a couple that you might want to posit and answer.
I. Are You Playing in the Right Sandbox?
In other words, is the market you’re currently going after the right one? Is it big enough to sustain a 10X business? If you’re local, do you need to go state-wide or regional? If you’re regional, do you need to go national? Or global? If the market you’re in is too small, do you need to completely change and enter an entirely different market (maybe even with a new product)?
Remember, strategic work isn’t about where you’ve been, it’s about where you’re headed. Just because you’ve been in a certain market for years doesn’t mean you have to stay there. When Apple realized that the potential market for smart phones was in the billions vs. desktops that were in the hundreds of millions, they realized they weren’t playing in the right sandbox.
So are you playing in the right sandbox to drive a 10X company in the next few years?
II. Do You Need to Focus or Diversify Your Offerings?
This question depends on what stage you’re in. When companies are smaller, they often tend to do too many things, which makes it both hard to scale and for the market place to understand what they do. So for a lot of small companies, reducing what their core offering is so they can be the best in the world at that one thing is a great strategy if you want to generate a 10X return.
On the other hand, if you’ve been riding a core offering for a while and you’re getting to the point of diminishing returns on your marketing efforts, you may want to consider adding some additional revenue streams. However, in the spirit of the 10X conversation, you don’t want small return revenue streams. If you want a 10X return, at a minimum your new stream should be able to generate 1X your current total revenue (even better if its 2X or 3X your current revenue number—i.e. no small ideas allowed).
So, do you need to focus or diversify your offerings to 10X your company?
III. What Kinds of People Need to Be on Your 10X Team?
One of the unfortunate realities of leadership is that we’re often leading people today who won’t make the whole journey with us (i.e. they’re working themselves out of a job, helping us build something that they themselves won’t be able to participate in because they don’t possess the skill sets or capabilities to lead or work in that larger environment).
But to build a 10X company, you need to have some highly talented people. So, what kinds of people will you need? What will your org chart look like? What kinds of responsibilities will each of your top team members need? Hopefully, as you think of your 10X team, you’ll feel inspired. Won’t it be great to work someday with that group of people?
So, who will you need on your 10X team?
IV. Who Do You Need to Associate With?
Very few companies grow 10X on their own. Usually, they build some strategic partnerships to accelerate their growth. For example, let’s say your company produces a widget for home cooks. On your own, you’re doing okay, but if you could create a strategic partnership with a retail outlet like Bed, Bath and Beyond or Target or a partnership with a celebrity chef or the Food Network or Food and Wine Magazine, etc. Any one of those could accelerate your success.
10X companies simply associate with other players at a higher level. They build strategic partnerships. They share access to other sources of capital. They hang out at different places. They network with a different clientele of person, etc.
So, to 10X your business, who do you need to associate with/build a relationship with?
V. Do You Need to Employ an Acquisitions Strategy?
Very few companies do 10X on organic growth, they utilize accelerators. And one of the key accelerators for growth, especially once a company surpasses $5M in revenue, is a healthy M&A strategy.
Why? Because the amount of time it takes to come up with a new idea, build a business around that idea, market that idea and get traction for that idea is several years in the making. However, when you buy a proven business with a positive cash flow you’ve significantly reduced both your risk and time to market.
So, do you need to start thinking about an acquisitions strategy to 10X your company?
VI. What Do You Need to Systematize and Automate?
Scaling fast isn’t about customization and one-offs, it’s about first systematizing what you’re doing so you can leverage other people and/or technology to add more capacity fast. And then, whenever possible, to completely automate the processes (taking people out of the equation) so that you can add more capacity both faster and cheaper.
Note: this question can often lead back to question #2 about focus (i.e. should we eliminate the more customizable work we do and focus more on those activities that we can systematize and automate?).
So, what do you need to systematize and/or automate to become a 10X company?
VII. What Kind of Risk and Commitment Are You Willing to Take On to 10X?
As you know, moving out from the comfort of a 10 or 20% growth rate usually increases the level of risk and investment. So, before you jump into a 10X plan, I’d highly recommend that you do a gut check and ask yourself how much risk you’re willing to take on. Once you answer that, I’d then encourage you ask yourself, “How much am I, personally, willing to commit to creating this kind of 10X company?”.
There’s nothing wrong with choosing to stay small. But if you want to create a 10X company, it’s going to require you to risk more and change more than anyone else.
So, are you okay with taking the kinds of risks and making the kind of commitments that will be required to create a 10X company?
Once you answer those seven questions, more will pop up. However, you’ll have begun to think at a different level and you’ll have taken the first step toward becoming a 10X company—which all begins by simply asking a series of 10X question.
To your accelerated success!
P.S. If you have some other questions or ideas of what it takes to create a 10X company, make sure you add them in the comments section below (or click here >> if you’re reading this by RSS or email)