What it takes to build multi-million dollar startups
Monday, November 21, 2016/
Over the past nine years, property agent service comparator Local Agent Finder has become one of the fastest rising stars on BRW’s Fast 100 with its compound annual growth rate jumping to more than 80% in the last year.
The company turns over more than $7 million and talks for an ASX listing have commenced.
How exactly did they achieve such a feat in an increasingly saturated market battling against new competitors everyday?
Local Agent Finder CEO Matt McCann says it all comes down to a smart approach to data, great culture, the right people and a dedicated strategy to learning and responding to your customers.
“It has been 17 years in startups for me,” McCann, a founding director of music app Shazam, tells StartupSmart.
Shazam now boasts more than 100 million users worldwide.
McCann has also been the CEO of Comparethemarket.com.au and iSelect, brands made popular on national TV with ads starring meerkats and Jason Geary.
But big budget advertising aside, McCann says at the core of great startups are some best practice strategies.
Here are three of them.
1. Know when to pivot and ride the wave
McCann says Local Agent Finder hit a growth spike when they decided to pivot.
“It was a subscription based agent profile site,” he says.
“The pivot for us was moving the business from a publishing model into being a real advisor and comparison service.”
This, he says, reset the business onto a sharp growth trajectory over the past four years.
The decision to pivot was driven by their data.
McCann says the market value, determined by their target consumers, for the publishing model was not enough to take Local Agent Finder on a sustainable growth path.
Looking at consumer behaviour and spotting this gap, enabled Local Agent Finder to ride the wave when a “fanatic shift” occurred with a growing expectation that the internet would be a primary source of information for all types of products and services.
“Unlike a real estate or a domain publishing style model, the comparison model is driven by acquisition marketing, building a propelling brand proposition for consumers, a deeply data driven comparison platform and a significant agent network,” he says.
2. Be clear on why people should give a damn about your startup
The difference between startups that make it and the majority that fail is not simply a beautiful product or service, but whether other people could actually see that value.
“Build a meaningful proposition for consumers and communicate it,” he says.
3. Fuel your startup with a great team and culture
One of the worst things new entrepreneurs can do is put growing a business ahead of building a strong team and culture.
“Sometimes, people have the perception that comparison services are simple things to launch,” he says.
But it’s a false belief that if you create a great product it will simply find its own legs and take the world by storm.
This is why it’s vital, says McCann, for founders to reach out and bring in people with capabilities, knowledge and experience that’s relevant in the space they’re trying to crack.
“By having a team that has been in comparison in one form of another over the most recent years [means] we’re not learning as we go,” he says.
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