“But company X just raised $100 millions dollars!”
It’s every business owner’s nightmare to see their competition rake in millions in funding overnight.
All of a sudden, you know you’re going to face an onslaught of targeted ads, content, and marketing campaigns designed specifically to steal your customers.
Yet the business world loves to glorify this kind of never-ending growth.
If you’re not bringing in more each month–more customers, more revenue, more funding–then you’re supposedly doing it wrong.
But if the global slowdown caused by the spread of coronavirus has taught us anything, it’s that this mentality is fatally flawed. Non-stop growth isn’t sustainable. The businesses that spent all their time looking at the horizon and not enough looking inward and starting to crack.
As we look forward as a community, we need to find a better, more sustainable way to think about running businesses.
Why you should choose a sustainable business over growth at all costs
If you listen to popular beliefs, building a business is all about growth. Your success is measured in percent increases, more revenue, bigger investments.
But what if this is the wrong way to look at growing a company?
What if we’re all being blinded by the vanity metrics that companies love to share to show off?
In his book, Company of One, entrepreneur Paul Jarvis explains that most businesses expand simply because it’s easier to throw “more” at a problem than try to solve the root cause.
- Want more customers? Hire more employees.
- Want more revenue? Spend more on ads and marketing.
- Need help supporting all those new, non-ideal users? Hire a larger support team.
This is the path that so many businesses take. And they’re celebrated for it. We celebrate large funding rounds and hiring milestones without ever realizing that this might not be the right path.
When you take a step back, growth really becomes a bandaid for problems that could be solved in a better way.
Instead of hiring more employees, what if you looked for ways to run your company more efficiently?
Instead of spending more on paid ads and marketing campaigns, what if you looked for organic ways to reach your ideal customer?
What if you dealt with your ballooning support requests with more on-demand resources, education material, and better user onboarding?
The problem is that all of these paths take more than just time and money. They take a purposefulness that too many people give up in favor of short-term thinking. However, if done properly, the end result is a stronger, more resilient business.
“Growth, in the typical business sense, isn’t always a smart strategy if it’s followed blindly… It can leave you with an unmaintainable number of employees, unsustainable costs, and more work than hours in a day. It can force you to lay off employees, sell your company at a less than optimal price, or, even worse, close up shop completely.”Paul Jarvis, Company of One.
What we’re talking about here is understanding what growth means to you, staying sustainable, maximizing your productivity and profitability without burning you and your team out, and growing ‘enough’.
By reframing how you think about building a business from unchecked growth to sustainable (and repeatable) success, you’re setting yourself up for the long-term.
Companies that understand the underlying levers that contribute to user and revenue acquisition are naturally better suited to weather economic crises and maintain consistent growth over time.
However, if sustainability, stability, and profitability aren’t enough to get you thinking about growth differently, here are a few other factors to consider.
1. A sustainable business is more creative and innovative
It’s a common misconception that you need more resources to be innovative. You don’t need to spend more time researching content marketing trends. Nor spend resources trying out every single team file sharing tool just to find the ‘best’ one.
While researching his book, Frugal Innovation: How To Do more With Less, Navi Radjou met with and studied hundreds of entrepreneurs in emerging markets.
What he discovered was that a lack of external resources, such as energy, infrastructure, and capital, led even major companies to focus on more inventive solutions.
“When external resources are scarce, you have to go inside yourself to tap the most abundant resource: Human ingenuity.”
Looking inward has helped lead to everything from the invention of the Post-It note to the GoreTex company launching a new line of best-selling guitar strings!
2. A sustainable business creates a happier workplace (which has all sorts of knock-on benefits)
As Dean Burnett writes in Happy Brain: Where Happiness Comes From, and Why, the number one factor for workplace happiness is a sense of control. But when your company is always running at an all-out sprint, it’s impossible for your team to feel like they have any sort of stability.
Non-stop growth companies are stressful.
And while a little bit of stress is understandable, too much can have negative impacts on your company and your team. Stressed-out employees have a harder time staying focused, are less motivated, and more likely to take time off or even hit burnout and leave.
3. A sustainable business is more focused
When you work in a sustainable way, it simply means you’re clearer about what matters and what your definition of done is. You know your purpose, who your user is, and can build a company to serve them (and you!)
That level of hyper-focus is one of the most important factors in success and growth. As Steve Jobs famously said:
“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.
I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things.”
Sustainable businesses are better for everyone
A massive study put out by Nielsen found that 66% of global consumers around the globe are willing to pay more for sustainable goods.
While this manifests itself mostly in consumer goods like fashion, food, and cosmetics, the sentiment works for businesses of all types. Simply put, customers want to buy products from companies that make them feel good.
It might seem paradoxical but the more you care about people over profits, the more likely you’ll be to see both.