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When it comes to Chicago tech companies, there is so much talk about those that are the fastest-growing and the quickest to scale. It's hard to see past their current successes back to the days when these companies were experiencing slow or flat growth for an extended period of time. Jellyvision CEO Amanda Lannert, for example, said that "slow growth despite big aspirations" defined the company's first seven years. Today, the company still has big goals, but has a growth rate to match with plans to hire over 150 employees in the next year (team pictured above).
No doubt that Lannert has a few words of wisdom from not just surviving, but thriving from, those tough days. Built In Chicago caught up with her, Sprout Social founder and CEO Justyn Howard, Load Delivered Logistics CEO Robert Nathan and GiveForward co-founder Ethan Austin to gather their advice for younger startups currently going through a bit of slow growth right now. Here's their top tips:
1. Use the time as an opportunity
"Early slow growth periods can be incredibly valuable times for a startup. In Sprout's first year, revenue growth was slow but it ended up being one of the most important in terms of long-term growth. We learned how to maximize efficiency, ignore the unnecessary and be scrappy in ways that we might not have if growth was a little more abundant. We were able to resist distraction and distill our mission in a way that solidified it for the next several years. It was also one of the most formative times for us as a team. You hope to never see stalled growth in the later stages, but early days slow growth can be a blessing. With immediate success, you miss out on building some muscles that you're definitely going to need later on when adversity comes." - Howard
2. Be transparent, but with a plan
"We were very clear with staff (roughly 20-30 over the course of this time) about our goals, the financial realities we faced (aka lackluster revenue), and our real commitment to make it work. I think there's a balancing act here: employees want and deserve a clear picture of their employer's business, but a pep talk and a real plan go a long way. The explanations of 'it's not working for these reasons, and this is what we're going to do about it,' afforded us a very stable and motivated workforce even when things didn't go our way, and as bonuses and big salary increases weren't on the table as incentives. I don't think ignorance is bliss, but I also think grim news with no assessment and action plan is terrifying and demoralizing. Be honest, but do have an explanation, as best you can as to what's going on and why, and what you're going to try differently." - Lannert
3. That goes for investors, too
"It’s easy to stop updating investors as much as you do during good times. Continuing to update investors no matter what is just a good practice." - Austin
4. Be stubborn
"The trick for Sprout was not to lose focus on our direction. Pivoting might have been the default answer based on a lot of current thinking but we were stubborn and spent a year marching forward and building a really solid foundation for the company. When we ultimately reached the next milestone, things changed overnight and we were off to the races. You question everything when you aren't growing, and you should, but knowing where to cede and where to forge ahead becomes the key. Nobody can tell you how to navigate that process; but for Sprout, staying the course was the right move." - Howard
5. Stay scrappy, but don't cheap out on people
"Jellyvision is not a no-frills company by any stretch, but we are, as our founder Harry Gottlieb says, 'depression era babies.' We appreciate a dollar, and have a history of making it go far. Back in our 'slow growth days,' we never cut salaries of our employees but we did cut costs and tried to do more with less - less business travel, less fancy gear, less training, and fewer hires than we could have used. And our offices were furnished with furniture from Harry's parents basement for many years. That 'scrappiness' and focus on spending on what really matters - talented people - really slowed our burn, and still serves us well as scale." - Lannert
6. Focus, roll up your sleeves - then just move faster
“I think that all companies define slow differently. Building a business is a sprint, a marathon, a decathlon, a constant evolution, a journey of change and adaptation. When VCs or PE firms give me their standard, 'What keeps you up at night?' I chuckle. My response is: 'Nothing moves fast enough.' Tactical execution takes time, and the word 'slow' shouldn't really be in a startup CEO's vocabulary. My advice for companies that are at a standstill is to focus, roll up your sleeves, work harder, work smarter and innovate." - Nathan
7. Change the metrics you are looking at
"When you don’t have that addictive aspect of ‘winning’ every day, you dig deeper into your mission and remind everyone why you’re here. In our case it was reminding ourselves of the people we’re helping. In the very beginning, we measured our KPI not from revenue, but from ‘hugs’ which are emails or letters from people who told us that this website changed their lives. If we can change the world for these people, imagine what we can do when we get the word out. It keeps you believing in your mission." - Austin
8. Expect tech setbacks (like replatforming)
"Instead of going full steam ahead and making the product even more fabulous, we have been rebuilding the same thing on just a different platform. It just slows things down. We picked PHP a long time ago in 2008, then we rebuilt in 2010 and looked at PHP vs. Rails, but still chose PHP because there were a lot more PHP developers. Of course in the years since, it’s definitely flipped and now we are rebuilding on Rails this year." - Austin
9. Be opportunistic, but realize it comes at the price of focus
"We were, and are, a company that realizes the value of creating and maintaining our own IP. However, Jellyvision is alive and thriving today because we had lucky phone calls from patron saints on more than two occasions who wanted to hire us for professional services/work for hire gigs. We created talking cars, humanistic voting machines, and educational software for kids. But what we didn't create were repeatable processes or Jellyvision IP that we would be able to commercialize broadly. What saved us in terms of short term revenue, in certain respects, also set us back in terms of long-term focus on our own products, tools, and processes." - Lannert
