The Growth Stage
One of the things that I love most about blogging is that often the process of writing helps clarify my thoughts. I crystallize my thinking. And in many cases I learn. Both through the writing process and through the feedback I get. To date, I have written primarily about early stage startup issues because that’s what I was facing myself.
My blog has not been getting too much love since I joined FreshBooks. The main reason is that I’ve been busy. The other is that FreshBooks is a growth stage company. And growth companies are very different from young startups.
Turns out the interwebs are full of wisdom and guidance for early stage folks. That’s the primary audience that people write for. I guess because there are so many more people starting companies. There are a few folks like Fred Wilson that write about issues that span all stages. But for the most part if you’re running a growth stage company you have fewer reading options (along with a lot less reading time…).
So, going forward, I will be trying to share some things I am thinking about and doing at FreshBooks. Sharing some thoughts on building great, market leaders.
What is “Growth Stage”?
The demarkation between early and growth used to be very clear. A growth stage company had:
- At least $10M in annualized revenue
- Proven business model
- Good traction (hence the revenue)
- A management team (or a good chunk of it)
- Was raising $20M+ in it’s next round
The lines are more blurred these days. We frequently see companies with no apparent business model raise massive amounts of capital. The most recent example being Snapchat.
$10M is not a lot of revenue, but the sad fact is most startups never come close to achieving it. If you get there and have a proven, repeatable business model, have a team to help you scale and are funded – then there’s no reason why you would stop. You keep going to build a market leader in your category.
This is why returns in VC land are concentrated in a few big exits and a select handful of funds. It’s those big outliers that bring in almost all the returns.
And this is exactly why I joined FreshBooks. I’ve done a lot of early stage stuff. I’ve operated and invested. But I’ve never helped build a long term market leader. A company worth billions, employing thousands. We need more of these types of companies in Canada. That’s what I’ve signed up to help build.