Common Bottlenecks for Growing Startups & How to Get Unstuck

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Startup Bottleneck Photo by Thomas Picauly (Unsplash)

There’s no such thing as the perfect startup. At some point in your entrepreneurial journey, you’ll reach a point where you’re hitting a wall, an idea isn’t sticking with your audience or revenue isn’t increasing no matter how hard you try.

With over 300 entrepreneurs who have come through Spring Startup School’s programs and workshops, we’ve seen a wide gamut of growth issues for early-stage startups. We believe in making impact mainstream and providing our community with resources and help whenever we can. With that said, here are the top three most common bottlenecks (or early indicators that you need to pivot) we’ve seen and what you need to get unstuck by our Program Manager and Lead Facilitator, Chin Hing Chang.

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AARRR (!!)

First off, a quick intro on Pirate Metrics, coined by Dave McClure, Founder of 500 Startups. These 5 metrics represent the customer lifecycle and their behaviours:

Acquisition: How do you get customers/users?

Activation: Do they get to the magical ‘Aha’ moment?

Retention: Do they stay around/come back?

Revenue: Can you make money?

Referral: Is it growing organically?

Bottleneck 1: Bad Growth

Acquisition/ referral issues. This might be because:

  • You have yet to identify the right channels to acquire your users/customers
  • You aren’t able to articulate the value proposition clearly enough
  • You are a solution looking for a problem and market

How to solve it: Listen to your customers, focus on their problem, tasks they want to accomplish, NOT your solution. By doing some customer discovery you will be able to better articulate your messaging in a language that resonates with your audience.

Bottleneck 2: Retention

Activation/ retention issues. Adoption might be high, but it’s not ‘sticking’:

  • Too many steps to get customers to that magical moment
  • Bad UI/UX
  • Not delivering on the promise

How to solve it: Investigate and see if the following need improvement

  • The quality of your product/service
  • User journey and UX
  • What is that magical moment? And how can you expedite the journey (i.e. getting their first student on your education platform, getting the first meeting request on your calendar management system?)
  • Current alternative solution and difficulties with switching to yours
  • Building a habit into their behaviour regarding your product/service

Bottleneck 3: Economics

Revenue issues. Think about this, Whatsapp, Snapchat, and Instagram are all doing well in all other metrics but struggling with revenue model.

How to solve it: Plan for revenue on day 1

  • Distinguish between customers & users and focus on the customer.
  • Test revenue models early. Examples include: subscription, freemium, refills, pay-per-use, and licensing
  • Explore how you can you build recurrency into your model
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