Scaling a business could be hard and frustrating. Many founders struggle to assess their opportunities to develop a competitive advantage and manage a successful marketing campaign with fewer resources.
Andres Mores, Endeavor Miami Board Member, shared the key elements for successfully scaling a business at the Endeavor Marketing Gathering in March 2020. With more than 10 years of entrepreneurial experience, Andres is the founder of Open English – the leading internet-based English language education platform. He has raised over USD $120 million in venture capital to drive the company’s expansion throughout the globe and attracted more than 650,000 students since the founding of the company. In the following article, we unravel some of the advice he shared with the Endeavor team.
1. Know your strengths
One of the most important things, from establishing a new product to scaling it up, is to define your unique competitive advantage. In general, this could be the price, the product or the personal experience.
Moreover, being an owner, executive or a manager, knowing your personal strengths and hard skills, contributes to better leading the business. As per Andres Moreno there are two types of people according to their mindsets:
- Scared to make mistakes – People who fall into this category are usually more conservative – they carefully think over the risks before making the final decision. This type of people usually become great executives and CEOs.
- Bold and Innovative – Usually these people have “the fear of missing out”. They are more likely to take risks and make many mistakes. They are motivated by failure and accept it as a challenge. This type of people usually become great entrepreneurs.
Many founders create their business and become successful entrepreneurs because they have the second type of mindset – they are bold and innovative. Nevertheless, they manage to keep their business healthy and prosperous because over time, they become more conservative and adopt characteristics of the first type. Owners may learn to balance themselves between the two types over time.
2. Set time and money limits before testing new products
A key element when launching a new product is to explore the market and evaluate the viability of your product. Huge amounts of money are spent every year in market testing. According to Adres Moreno, founders should be careful on the resources they invest in testing new products. In running tests, there is much less room to maneuver or ground for making mistakes. Instead, he suggests building a prototype and notes that the single most important thing remains to understand the problem that you are trying to solve or simply “to fall in love with the problem you’re solving.”
3. Constantly optimize your business
Let’s assume you have a great business and everything is running smoothly as you have planned it. It is time to relax and keep everything as it is, right? Not exactly. You should constantly challenge yourself what else you can do. Moreno shares 3 strategies how to create more added value to your company:
- Create related products
If you have a great product try to design a new one in related area. E.g. you current one is focused on the adults, why not develop a similar one focused on the younger generation.
- Create new manners to construct your business
In these constantly changing times, there are always new ways in which a business can operate. If you are not familiar with them, you competitors might be and they can take advantage of it. For example if your business is running on one-one meetings, try to explore the opportunity for virtual or group meetups for some of the gatherings – that way you can be more flexible and gain time from transportation from one point to another.
- Reorganize your value proposition
Be open-minded to hear the customers’ needs and to explore thoughts on new value proposition. For instance, if you offer a three-month language course on a certain price, explore a shorter more intense course, i.e. one-month, on a higher price. Even though the execution time is shorter (which may not be more expensive for you), the value for your customers is higher.
4. Create measurable and saleable adverts
Television is just one of the channels to promote your business – internet has become a significant platform to gain more traction and search engineering marketing (SEM) stamps as spinning point for a good marketing campaign.
- Know how much each customer costs you
Andres stresses that in the end of the day, marketing is just a science of functions. In order to make the economics work, you have to do the math before starting a marketing campaign. For that purpose, you need to know how much costs you to acquire each new customer, which can be easily calculated with this formula: The sum of the costs of marketing plus the costs of sales, divided to the number of the clients (made throughout the camping). With this ‘converse formula’, you get the costs of each new customer, and not just the initial price but the lifetime value of the campaign as well.
- Advertise per your budget
Choosing the best advertising platform for your business can be tricky. We are familiar with the expensive TV commercials, presenting many opportunities, but costing a lot of resources at the same time. Moreno advises to choose wisely the channels for boosting your brand. He points that we live in times where most of the people are on social media and it is easy and less expensive to promote your business there. As SEM shall not be skipped, social channels present great opportunities to start your advertising campaigns.
In conclusion, Andres reveals that all of the above comes after you have the most important ingredient – to believe in yourself and the success of your product. Being an entrepreneur is a way of living – you have to be able to make scarifies and be committed to your purpose for a long period.
Thanks to Andres for sharing such practical tips with our Endeavor team!