5 growth lessons I learned while scaling from $0 to $1M ARR

While building a startup may seem easier than ever because of the assortment of tools available, the available statistics on being successful still do not favor founders.

In the past year, I’ve had the privilege of co-founding Sales Kiwi, a virtual sales staffing and marketing service company, from ground zero to over $1 million in annual recurring revenue (ARR) and more than 25 employees.

What separates the startups that succeed over those who fail? While I don’t have a crystal ball to predict everyone’s futures, I do have a wealth of stories and experience gained from my work scaling our company. I’m here to share my top five growth lessons, with the aim to help you avoid making the same mistakes that we made early on.

1. Focus on a max of two growth pillars at a time

My first lesson can seem a bit obvious, but not spreading oneself too thin early on is imperative. In the area of growth specifically, I never tested more than two paid channels at a time, which is how I was ultimately able to unlock acquisition for my team. This applies for all forms of growth, so if you’re trying to unlock lifecycle marketing, don’t also put efforts into unlocking four paid channels at the same time. This gave me the ability to optimize and experiment with the channels that I was immediately working on, rather than taking the approach of throwing everything at the wall and seeing what stuck. Once we had found success on a specific channel, I’d follow the same principles with other forms of growth marketing, such as lifecycle, referrals, or affiliates.

In contrast, you also need to ensure you don’t spend excessive time focusing on one channel that isn’t showing any viability. A quick back-of-the-envelope method to assess whether you may find success on a channel, or not, is if your customer acquisition cost (CAC) is 5x where it should be, or you’re only seeing sub-5% of your conversions coming from the growth pillar after a few weeks of testing. There are a few exceptions to this such as content or SEO which typically have longer timelines before you encounter success.

2. Don’t overcomplicate your reporting

It’s not easy to have perfect reporting. This is especially true for startups. One of the biggest shortcomings at my startup was attempting to perfect our tracking with complex dashboards on our customer relationship management (CRM) software. As we scaled rapidly, we kept trying to create new dashboards to accommodate the new data points we wanted to measure, which was ultimately a big mistake.

Today, I am a firm believer that perfection can either make or break startups early on, and the first $1 million in ARR does not require expensive tools for reporting. Instead, one should leverage free tools like Google Sheets to create reports for your growth funnel, retention, and any other tracking that you’re looking to measure. There are also many resources, such as GooDocs, which provide free templates for revenue tracking or project management that can be customized to your startup. It does not make sense to spend time reinventing the wheel with fancy frameworks when you can easily download a free template.