Innovation: The Path from $100 Million to $1 Billion
Constant innovation is what drives a company to grow from $100 million to $1 billion. To stay viable, a company has to reinvent itself every couple of years, at least, and that reinvention can never stop. There is no such thing as a company reaching its “peak,” although that’s a worthy goal. Many companies plateau instead because they don't focus on innovation. Those are the companies that will never see their billion-dollar valuation.
Innovation at a large company carries with it an elevated level of intensity. A lot of things are forgiven in a startup that won’t be forgiven in a large company. A smaller company finds its product-market fit as a startup, and, as it evolves, it engages in a perpetual search for that right fit.
In a large company, that product-market fit has already been defined. Now, instead of searching for the right fit, you’re looking to either maximize benefit within the fit you have or to expand that fit. Anything you introduce will immediately have a large impact, so you have to think about eventualities from the get-go, including the impact on your existing customers and their consumers. While all innovation at this stage is incremental, the expectation when you introduce something new in a large company is that it will meet the high bar of your other products.
Sometimes, constant innovation can be a tough sell within a company; some executives don’t want to take what they perceive to be risks of time. Executives like those are focused on immediate success and ROI. For those companies, their path to growth may not be through in-house innovation or even iteration but, rather, through the acquisition of complementary companies. Some large companies, like Amazon and Google, separate their innovation teams into lab environments, which is one way they can have competing groups even within their own companies.
No matter how it happens, the saying is “innovate or stagnate.” You don’t get to a $1 billion valuation by stagnating. One of the best ways to attract new customers and retain old ones as a company of any size is by showing customers that you are focused on their success. Enable them to flourish alongside you on an escalating path toward meeting and exceeding their needs as you scale and grow, considering their ongoing adoption and transformation mindfully. Customer loyalty is built through joint successes. And happy customers are much more likely to continue to expand their product and usage footprint with you.
Until you reach $100 million as a startup, your company is just running. To grow beyond that, you have to think broader and make the right bets in the right sequence — not too early or too late. All the while, you have to bring creative talent aboard while keeping your ear to the ground. You may be well on your way to that eventual $1 billion mark, but you still have to keep your ear to the ground and learn from other startups. Those younger companies are going to teach you trends. You can learn by watching them; they’re a window into where you, too, need to head.
As chief innovation officer for a company that has followed a growth path past that $1 billion mark, I feel confident that our next $10 billion will come from the same path that led us here: ongoing vigilance with regard to learning, growing, innovation and relentless focus on the customer.
Originally published in Forbes