Lately I’ve had a chance to talk to Wiktor, who’s the co-founder and CEO of Netguru, about the main factors that contribute to strong growth of software companies.
In less than 8 years, Netguru has become a leader in the software dev market, with offices all around Poland and a long queue of clients, from early-stage startups to corporate giants. They were the 5th company in the Deloitte Fast 50 ranking for 2 years in a row.
We discussed how Netguru’s dynamic growth progressed over time, and whether it’s possible to isolate a few key factors (besides being a company that simply DELIVERS) that made it possible for them to skyrocket on a global scale – and the results are very interesting, see for yourself!
Sales as the main priority
A CEO’s job is to make sure that money is flowing into the company’s account. Early-stage, this means hustling your shoes off to get first clients, but with time this becomes a matter of prioritisation.
And in Netguru, the hustle is strong – it was impressive to learn that Wiktor once moved to Dublin to look for deals while operating from a co-working space.
Sales is the trickiest challenge of B2B startups, so it just makes sense for business founders to treat it as their key concern. So get involved in sales all the way from looking for clients, to negotiating deals with them.
There are different paths founders can take from there:
Sell and start building your in-house sales team
Look for an experienced head of sales to build your in-house team
Hire outside companies for parts of your sales process like prospecting and outreach
.
The first path is what happened at Netguru. It’s a great approach for keeping your ears to the ground – nothing will generate better insights and feedback than regularly talking to your customers. And the information you gather will help you speed up improvements in other departments of your company.
Right now Netguru is looking for their Head of Sales – and it’s hugely important to get the right person to take sales over, so this isn’t a decision that can be rushed.
Where should new clients come from?
In early-stage companies most clients come from referrals. Later on (“later” being a different time for each company) comes time for organising more sophisticated processes to get to your clients.
When that time came, Netguru’s team started doing content marketing. It took about 2 years before it started performing well (but that’s the usual case with B2B content marketing), and now content delivers 1/3 of all new potential clients.
About a year ago was the time that another marketing tactic came into play – cold mailing. With an in-house sales development team, after a year this tactic delivers another 1/3 of new potential clients the salespeople at Netguru to negotiate deals with.
The last 1/3? It’s still referrals, because a good company is always going to get recommended – and clients that come from referrals are often the best business partners.
But the point of all this is – get new clients from multiple sources. For instance, referrals as the only source of new clients just limit you to your close network.
To reach beyond, you need marketing tactics – like content marketing or cold mailing – and it’s best to combine outbound (you reach out to clients) and inbound (clients reaching out to you) ones, because sales leads from these sources are different.
How big clients impact revenue
Netguru isn’t different from other software companies in the fact that they’ve also experienced a risky situation with a big client that was responsible for 1/3 of revenue.
The solution here was to expand the team and make Netguru bigger. This was just a spark to better define their path towards growth, and now no client is responsible for more than 10% of revenue. In other words, Netguru isn’t dependent on individual clients, because even if they drop-out then 90% of revenue is still intact.
And 3 continuously executed marketing tactics keep new potential clients coming, so the empty slot can get filled quickly.
Evolution is always better than revolutions
Evolution – constant monitoring and analysis of company processes – are much better than revolutions – putting out fires when things stop working.
Growth isn’t the result of one specific thing – it happens when you regularly take small steps to pouring a solid foundation for a company that’s scalable in every aspect.
When you analyse company processes regularly, you’ll quickly realise when things aren’t working. You should optimise, test new solutions, change and improve what you can and it will lead to a natural evolution of your business.
For example, one of the most important decisions the Netguru team made was to provide services for all clients according to a unified process. This is crucial to scaling your services, because it’s hard to grow when you’re adapting your process to each client individually.
Instead, it’s better to improve one process based on feedback from multiple clients. A “growth mindset” means constantly analysing performance and regularly taking the necessary steps towards improving it.
Blueprint for software company success
So there are 4 things that are a catalyst for software company growth:
Founders’ focus on sales
Multiple sources of new clients
Minimising risk of big client’s impact on revenue
Overseeing your business and improving it regularly
.
It takes patience, but keep taking steps towards becoming a better company – in all aspects – and you’ll see that these changes compound and their effects keep multiplying as long as you’re persistent in your hustle.
Small changes will make the fundament of your company strong enough to grow it into a global industry leader.
