Taking Advantage of Opportunities
This is the fourth article in a series on creating consistent growth over a long period of time.
At BP3 we’ve had a compounded annual growth rate (CAGR) of more than 50% over our first 9 years, including a 50% growth rate in 2015. We’ve doubled in any two year period you can pick on the calendar over the life of the company, including 2007–2009, and 2008–2010.
In this series we’re attempting to address the question: How do you sustain this kind of year-in, year-out growth despite the ups and downs of the economy, ecosystems, and technologies?
We’ll attempt to address the keys to sustainable growth through our eyes over the last 9 years, by sharing the principles that helped us throughout, shared over the next 8 posts. Last time we discussed principle #3: Customers will Save you. In this, the fourth post, I want to focus on another principle of growth: taking advantage of big opportunities.
Converting the Big Project
In 2009, we received a call from a major systems integrator. Initially we were thrilled, until we realized really it was a recruiter calling trying to hire or contract us into a project for that integrator. They didn’t want a team, they wanted individual bodies.
We picked up the phone and turned that recruiting attempt into a contract for our company. They needed 5 people — and we only had 5. We promptly added three more people we had always wanted to hire to our team and took the business.
[Side note: when you’re starting out, *always* have your eye on who your next hire is, if not your next 5… this is a good habit to get into early on, it pays off even more as you grow]
The following year we were offered another project — that required 11 people to deliver. We only had 11 team members at the time. By the time the project started we were 18 people and had hired a few of the BPM experts in our ecosystem that we had always wanted to bring on board.
In both cases we took an opportunity and grew our company to the next level. We continued to take care of our previous customers, while taking care of a big new client. Effectively we doubled our business in each case over the following twelve months. Of note, the people we hired in these two cases are still with us today. They weren’t short-term tactical hires, they were people we knew we wanted but we needed the project to help pay for them.
Avoid the Single Customer Trap
Too often I see companies confronted with a single customer opportunity like this, and they become a single-customer-company. You can grow a pretty good business doing this, but that single-customer risk will keep you up at night and cap your growth.
I once interviewed for a job with a company that had a single customer- and fantastic relationships there. Part of my pitch to them was that I could help them expand their horizons to other customers and take what they were doing to another level. They turned me down — but a few years later I found out that they were out of business. Their key sponsor at the customer had been sacked in a management shuffle and they had lost favor. And they had never learned how to sell what they were doing to other customers. That’s life in single-customer land.
I think we all have at least one single-customer company story. It isn’t up to the customer to protect you from this, it is up to you to protect yourself.
Having said that, I’ve seen companies overcorrect the other way: “we have too much single customer risk, so we’ll turn down this major project.” The way to fix single customer risk or customer concentration risk, is to grow out of it and find more customers. It isn’t to shrink or stunt the best relationships you have. Growth comes much more easily when you retain the customers you already have, or grow them.
We also had a couple key opportunities to expand the company through acquisition. We’ve had three successful acquisitions into the BP3 brand. Each one was an amazing opportunity but also a big risk (admittedly, a big leap of faith on both sides). The first acquisition was our largest, and it was a big commitment financially and organizationally, that logically risked our operational focus at home. But we knew that if we could do it successfully it would change the trajectory and scale of our company going forward.
We couldn’t pass up the opportunity to arrive in Europe and the UK, it was a risk worth tasking. And that’s how you have to evaluate each bet you make. Is the upside worth the risked downside? If so, be bold.
In summary, our approach was to always be ready to take on the next opportunity. To risk our capital from previous years on next year’s growth and expansion. At some point, you stop being surprised by the opportunities and you start focusing on being ready for them. One of the reasons we took funding was to be ready for the next wave of opportunities.