The REAL Reason Your Business Isn't Growing

Summary

The speaker emphasizes the importance of patience and strategic growth for entrepreneurs, highlighting common pitfalls such as prematurely diversifying into new product lines without fully exploiting existing market potential. They introduce three frameworks to assess and expand market reach, including marketing methods, platforms, and media volume. The video also discusses the 'Pyramid of Markets,' offering five directions for market expansion, and shares insights from a meetup with successful entrepreneurs, stressing the value of targeting bigger markets and the necessity of time in business growth.

Takeaways

• 🕒 Building a successful business takes time, and patience is crucial for growth.
• 💡 Entrepreneurs often make the mistake of diversifying too early without fully exploring their current market's potential.
• 🚀 To expand, consider three frameworks: marketing methods, platforms, and media volume within those platforms.
• 🔍 Evaluate your market based on four criteria: pain, findability, spending capacity, and growth potential.
• 🛠️ There are four immediate actions to increase leads: new methods, new platforms, multiple types of media, and increasing volume.
• 📈 The Pyramid of Markets suggests five directions for expansion: up-market, down-market, adjacent markets, broader markets, and narrower niches.
• 💼 Up-market means targeting fewer, higher-spending customers, such as enterprise sales or franchise owners.
• 👥 Down-market targets a larger number of smaller-scale customers, like individual hair stylists.
• 🔄 Adjacent markets are similar in nature but not exactly the same, opening up a new vertical to explore.
• 🌐 Broader markets encompass all adjacent markets, targeting a wider audience within the same industry.
• 🎯 Niching down can sometimes lead to higher profits by focusing on a specific segment that you serve best.

Q & A

What is the main challenge entrepreneurs face when they have saturated their market according to the speaker?

The main challenge entrepreneurs face is that they often believe they need to start new product lines or businesses when they have saturated their market. However, the real issue is that they don't know how to get more customers within their current niche or space.

What are the three frameworks the speaker suggests for thinking through market expansion?

The speaker does not explicitly list three frameworks in the transcript, but the general idea is to look at marketing methods, platforms, and media volume to expand within the current market before considering new ventures.

What are the four criteria the speaker suggests to evaluate when choosing a market?

The four criteria are: 1) Are they in pain, i.e., is there a problem being solved? 2) Are they easy to find? 3) Do they have money to spend on the product or service? 4) Are they growing, meaning the market is expanding?

What does the speaker mean by 'big [__] takes time'?

The speaker is implying that significant success or wealth accumulation ('big [__]' is a colloquial term for success or wealth) requires time and patience, as evidenced by the fact that there are not many self-made billionaires under 30.

What is the 'Pyramid of markets' the speaker introduces?

The 'Pyramid of markets' refers to the five directions a business can expand in a marketplace: up market, down market, adjacent markets, broader markets, and narrower markets. Each direction has different implications for the business's target audience and revenue potential.

Why did the speaker decide to expand to health clubs in addition to micro gyms?

The speaker decided to expand to health clubs because they found that they could provide significant value to health club owners, helping them to increase their bottom line substantially within a short period.

What is the potential downside of going down market according to the speaker?

Going down market means targeting a larger number of customers who typically spend less. While there are more potential customers, the overall revenue may not increase proportionally, and the business may become less profitable.

What does the speaker suggest as the first step for a business that feels it has saturated its market?

The speaker suggests examining and potentially increasing the marketing methods, platforms, and media volume to attract more customers. This includes running ads, making content, doing outreach, getting referrals, and using affiliates.

What is the importance of being specific about who a business serves best when considering market expansion?

Being specific about the target audience allows a business to tailor its messaging, offer, and value delivery more effectively. This can lead to higher customer satisfaction and potentially increased revenue, even if the market size is smaller.

Why is it a mistake to add complexity to a business that has only made three million dollars in revenue?

Adding complexity too early can divert resources and attention away from optimizing the current business model. It's better to focus on scaling up the existing operations and understanding the market deeply before expanding into new areas.

What is the speaker's advice for entrepreneurs who feel they have exhausted their current market?

The speaker advises entrepreneurs to look at the market from an investor's perspective, considering the total size of the industry and the potential for growth within it, rather than feeling that their market is capped.