Building a business can be challenging, especially in those first few fragile years known as the “blade years.” If you focus on a few simple principles, you can increase your odds of success of surviving those challenging times and thriving once you’re through them.
When we see flourishing businesses, it’s hard to believe that they haven’t always been that successful. During the first year of launching First Research, I had almost nothing to show for it. Our year end revenue was just shy of $4,000, we had $399 in cash, $899 in accounts receivable, and a $20,150 loan payable to me. Without being able to answer if I should keep going with First Research, I kept fighting, and I am glad I did.
The truth is, almost every business has had to endure what I call The Blade Years at some point to get to a place where their business is thriving. The Blade Years derives from the “hockey stick” revenue metaphor when revenue is low and hardly growing – the flat part of the stick. It is the period of time when founders have fully committed to making the business work. They have usually quit their day jobs and are ready to endure whatever it takes to launch through until they hit the growth-inflection point of their new business.
My research and personal experience show that this stage usually lasts three to four years, during which revenue is low, if any is coming in at all. The stress of inadequate funds, feeling burned out and experiencing extreme highs and lows leaves many founders overwhelmed and in a place of wanting to give up and wondering if they should keep going.
The Blade Years can be very tough, but because I decided to fight for my company, I was able to leave the Blade Years behind and eventually sell First Research to Dun & Bradstreet for $26.5 million. Here are a few tips that will help you make it through The Blade Years without breaking or giving up.
Do more with less and take on as many projects as possible yourself to save money. You can also find an alternate source of income to free you up from the emotional financial burden of having no income. It will allow you to focus your energy on developing your market and improving the product or service. These are the things you should be focusing on during the beginning stages of business growth. Don’t let the extra stressor of lack of finances dictate your focus.
Less Marketing, More Learning and Iteration
One thing I see over and over again during The Blade Years is people spending too much money on marketing efforts. In the earlier stages of business it is tempting to pour money into huge publicity pushes and campaigns to get your product or service in front of the public eye. While this is necessary for large businesses, it is not necessary during this time. Don’t pour too much into one specific targeted marketing program. Instead, spend time researching your market opportunities.
No Sudden Changes
When the going gets tough, it is easy to want to make big changes and quickly. Knee jerk reactions like these, especially during The Blade Years, may be catastrophic to the business. Before any major changes occur, weigh your options. Is it something that can be slightly tweaked? For example, is it time to consider developing a different sales approach? Remember that even one small change can make a huge difference.
By remembering these tactics and incorporating them into your own Blade Years, what you will find is that Hockey Stick growth is indeed possible; you just have to make it through the initial bumpy ride. Trust me, I have been there.
It’s tough starting and growing a business. Quick sales and instant success aren’t the norm. The unpredictable issues that will occur, such as the panic of not being able to support yourself or your family due to lack of income, feelings of incompetency as your entire initial market has shifted and the desires to change everything as soon as the going gets tough, these things are par for the course.
Welcome to the Blade Years! These years of business can be just as piercing and sharp as the blade of a hockey stick, but they can also be the driving force to your success and ultimate goals. Endure the Blade Years and fight for what you believe it. Let them mold you, guide you, encourage you and teach you and I promise they will not break you. You will make it through.
– Bobby Martin is the co-founder of two startups with hockey stick revenue growth: First Research (1999) and Vertical IQ (2011) and author of The Hockey Stick Principles: The Four Key Stages to Entrepreneurial Success (CLICK HERE to get your copy).
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