It takes more than a great product to create a successful consumer company. Growth advisor Mitch Stevko shares insights into what it takes to drive revenue and scale.
KEY TAKEAWAYS
- Mitch Stevko, the CEO of Growth CEO Advisors and an advisor at Impactful Search®, shares how the success ingredients of all growth companies are the same.
- Growth leaders that scale today’s most successful consumer companies are customer-obsessed.
- Interested in connecting with one of Impactful Search®‘s advisors? Reach out to Executive Director Rhonda Taylor via email here to get started.
Mitch Stevko has been working with growth leaders since his early days in Silicon Valley. Jeff Bezos and Elon Musk are among a few of the great minds that he’s collaborated with during his career.
In our interview with him below, he shares what it takes to scale growth companies.
Read the full transcript (edited for clarity):
I’ve been lucky enough in my career to get to work in a whole bunch of industries from health care to tech to consumer to practitioner channels to DTC and a lot of the success ingredients are the same — and if you follow the success formula of other companies, you’re often going to get similar results.
The number one thing that has to happen to scale is there has to be a great customer product fit for both the initial sale and repeat buyers.
One of the top key performance indicators (KPIs) is the lifetime value of a customer so if you don’t have high recurring revenue (if your customers don’t just buy once for most products), and you have a product — an anchor core product — you’ve got to have that right product price customer fit. Some companies really have to fine-tune that a bit for the product consumers are going to buy over and over again, a hero product.
Secondly, in the supplement business and also in the food and beverage business, we’re fortunate that a lot of these businesses are higher margin.
High gross margin means room to screw up and make mistakes.
The margins also allow you to go into multiple channels of distribution so when I find early startups and they’re planning on growing and being really large with a very low gross margin business, especially if that’s long-term, it’s okay if at an initial scale you might have to have a lower margin and then as you can scale up and buy in volume, you can add to that.
Most of the companies that are the most successful start with high margin businesses, high margin products, and a high margin mindset because marketing is more expensive than ever.
Customer acquisition is more expensive than ever and you want to also afford the best team possible so you can’t just be a growth leader, you have to have a growth team.
Obviously, you have to have strong marketing and sales strategies and focus more than ever on your customer acquisition cost.
People talk about customer acquisition costs and I’ve watched just over the last 7-8 years as different social media platforms become more successful, the cost has shot up astronomically and then huge multinational companies are coming in and buying content and ad space on the social sites just for presence. They’re not trying to capture a customer and the masters I’ve seen are impactful growth leaders that scale. The CAC is a blend of paid and unpaid. There’s often something called circular ‘viralocity’ where if you’re on several multiple things, it starts to get unconsciously in the customer’s mind and starts to reduce what you’re ultimately paying to capture that customer. And then the masterful part is keeping them and increasing your customer lifetime value.
Every single successful growth leader I’ve seen is customer-obsessed.
You’re going to need to scale which means you’re going to need team leaders in place. Certainly, the key areas that people look at are sales, marketing, DTC — an incredibly important position for most companies — as well as operations and finance, both of which become more important as you go into cash flows.
The last thing I see is that most impactful growth companies scale by focusing on crushing it first in one channel. If your first roll-out channel is to go to Whole Foods Market and get on some key shelf space, focus on that primarily.
Put most of your effort into crushing it first in one channel and then a lot of companies once they get up to $8-10 million, then they lean more effort into a second channel. By the time you’re $30 million, you really want to go multi-channel and also international if you haven’t already.
Interested in connecting to one of Impactful Search®‘s advisors? Reach out to Rhonda Taylor via email here to get started.
Rebecca is the Senior Editorial Director at ForceBrands. She’s spent more than a decade on the editorial side of digital media, curating original content and managing social media audiences for impactful brands and businesses. She’s a natural storyteller with a love for connectivity and brand building.