WEBVTT 00:00:07.683 --> 00:00:11.281 Choosing a growth strategy 00:00:11.316 --> 00:00:15.141 The best entrepreneurs that I know get really passionate, 00:00:15.176 --> 00:00:16.997 not just when they're talking about their product. 00:00:17.032 --> 00:00:18.848 When they're talking about their customer, 00:00:18.883 --> 00:00:20.651 how their products solve their needs, 00:00:20.686 --> 00:00:22.295 is a solution of the problem they've got, 00:00:22.330 --> 00:00:24.095 that's what gets them excited, 00:00:24.130 --> 00:00:25.256 that's what turns them on. 00:00:25.291 --> 00:00:26.866 Why does that make a difference for you? 00:00:26.901 --> 00:00:28.448 That's what growing's all about �� 00:00:28.483 --> 00:00:29.644 selling more of what you've built 00:00:29.679 --> 00:00:33.361 to an expanding customer set at an ever-increasing rate. 00:00:33.396 --> 00:00:35.974 I'll give you three examples. Nike. 00:00:36.009 --> 00:00:37.972 Of course they've made their brand around 00:00:38.007 --> 00:00:40.512 the elite athletes but they're really about empowering you and me. 00:00:40.547 --> 00:00:43.967 All of their product development is around us. Starbucks. 00:00:44.002 --> 00:00:45.388 They're not just lying as coffee, 00:00:45.423 --> 00:00:47.183 they're giving us a sense of community. 00:00:47.218 --> 00:00:48.705 The free wifi, the music, 00:00:48.740 --> 00:00:51.121 it's all about being part of that Starbucks family. 00:00:51.156 --> 00:00:53.427 And another example,Southwest. 00:00:53.462 --> 00:00:55.458 Not only are they selling you discount tickets, 00:00:55.493 --> 00:00:57.494 they're also one of the most reliable airlines, 00:00:57.529 --> 00:00:58.750 certainly in my experience, 00:00:58.785 --> 00:01:01.160 and they make the ride quirky and fun. 00:01:01.195 --> 00:01:02.841 Making the customer number one 00:01:02.876 --> 00:01:04.848 and everything you do from now on is 00:01:04.883 --> 00:01:06.983 going to be the key to successful scaling. 00:01:07.311 --> 00:01:10.678 Types of growth 00:01:10.713 --> 00:01:14.233 As companies grow over time, growth can take different forms. 00:01:14.268 --> 00:01:15.878 Some of the ways we talk about it 00:01:15.913 --> 00:01:18.052 are inorganic or organic growth. 00:01:18.087 --> 00:01:20.066 Organic growth is the core growth you think 00:01:20.101 --> 00:01:22.581 of when we first talk about it, hiring more people, 00:01:22.616 --> 00:01:24.802 continuing to broaden my product set, 00:01:24.837 --> 00:01:26.758 doing the kinds of things you normally do with 00:01:26.793 --> 00:01:28.453 the materials you have in front of you. 00:01:28.488 --> 00:01:31.313 So that's an investment in your core growth,that's organic. 00:01:31.348 --> 00:01:33.194 Then you have inorganic growth. 00:01:33.229 --> 00:01:35.305 It may mean acquiring a like shop 00:01:35.340 --> 00:01:36.937 across town and we're now a unit. 00:01:36.972 --> 00:01:38.564 We're gonna centralize processing, 00:01:38.599 --> 00:01:40.870 we're gonna share all hiring and firing, 00:01:40.905 --> 00:01:42.114 we're gonna share advertising. 00:01:42.149 --> 00:01:43.882 If you're a small company just starting out, 00:01:43.917 --> 00:01:46.571 and acquisition's a pretty big investment. 00:01:46.606 --> 00:01:48.755 As you begin to scale,get confident, 00:01:48.790 --> 00:01:52.113 understand how you execute and how to get successful. 00:01:52.148 --> 00:01:54.680 Beginning to consider acquisitions can be 00:01:54.715 --> 00:01:56.306 an incredibly efficient way to grow. 00:01:56.341 --> 00:01:58.345 Rather than building something from scratch, 00:01:58.380 --> 00:02:00.654 I can pick up something that's already built. 00:02:00.689 --> 00:02:02.598 Similarly, companies acquire as 00:02:02.633 --> 00:02:04.528 they want to grow geographically. 00:02:04.563 --> 00:02:07.218 I can be more effective across 00:02:07.253 --> 00:02:09.178 the globe when I pick up like companies 00:02:09.213 --> 00:02:10.678 that are already doing business in Denmark, 00:02:10.713 --> 00:02:12.505 that are already doing business in Asia 00:02:12.540 --> 00:02:14.325 as a way to go to market quickly. 00:02:14.360 --> 00:02:17.077 So acquisitions, that inorganic growth, 00:02:17.112 --> 00:02:18.550 can be a really nice complement to 00:02:18.585 --> 00:02:21.110 your organic growth as you really go on to scale 00:02:21.145 --> 00:02:22.734 and establish marketleadership. 00:02:23.315 --> 00:02:25.361 Benefits of growing quickly 00:02:25.396 --> 00:02:27.398 The many cases of growth is imperative 00:02:27.433 --> 00:02:29.610 and there's a reason why companies with 00:02:29.645 --> 00:02:34.223 little proprietary technology but a great idea like Airbnb or Uber 00:02:34.258 --> 00:02:35.636 really have to scale quickly. 00:02:35.671 --> 00:02:39.334 They realize that within the first months, 00:02:39.369 --> 00:02:41.606 certainly a year, everyone around the world would 00:02:41.641 --> 00:02:43.277 understand how exciting this is 00:02:43.312 --> 00:02:46.012 and if they don't get their first, somebody else will. 00:02:46.047 --> 00:02:51.312 And that's why there's an Amazon of China instead of Amazon in China. 00:02:51.347 --> 00:02:53.298 You have to keep up because you don't 00:02:53.333 --> 00:02:56.322 want to get left behind in a market you created. 00:02:56.357 --> 00:02:59.194 A good example of this is Peet's versus Starbucks. 00:02:59.229 --> 00:03:02.766 Peet's started in 1968 in Berkeley with Alfred Peet 00:03:02.801 --> 00:03:04.864 and it's now famous of course for its coffee. 00:03:04.899 --> 00:03:07.431 Three years later some of his employees moved 00:03:07.466 --> 00:03:10.342 from Berkeley to Seattle and Alfred Peet even helped 00:03:10.377 --> 00:03:11.861 them think about how to roast coffee. 00:03:11.896 --> 00:03:14.356 The Starbucks team now had a different vision for growth. 00:03:14.391 --> 00:03:16.614 They really saw the sense of community, 00:03:16.649 --> 00:03:17.756 how big they could be. 00:03:17.791 --> 00:03:21.488 And you fast-forward Peet's today is 200 stores. 00:03:21.523 --> 00:03:24.787 They sold in 2012 for a billion dollars. 00:03:24.822 --> 00:03:26.474 That's a good amount to a company in Germany. 00:03:26.509 --> 00:03:28.964 While Starbucks, 22,000 stores 00:03:28.999 --> 00:03:31.556 and they're worth 84 billion dollars. 00:03:31.591 --> 00:03:35.478 And the lesson is being first doesn't always mean you'll be the winner, 00:03:35.513 --> 00:03:37.217 you need to stay ahead of the race.