Finding Your Growth Formula: Recipes from Seedstars Startups Taking Off


Finding Your Growth Formula: Recipes from Seedstars Startups Taking Off

Eugenia Shevchenko

MAY 25, 2021

What a 'great' startup looks like can be subjective. Often, looking at the right metrics can be a useful guide which leads to insights and deeper questions. However, here at Seedstars we know there is a lot of nuance that goes into finding product market fit, discovering acquisition channels, and sustainably scaling a business. For example, founders may wear many different hats and what they choose to focus on can be a determining factor and crucial to unlocking a growth inflection point.

To try reverse engineer what goes into the growth formula among successful Seedstars startups, we sat down with three founders and got their most prized insights:

Roberto Salcedo founder of Baubap (FinTech in Latam), an online microcredit lender that provides credit underwriting leveraging credit scoring based on alternative data in Latam. We were particularly interested in understanding which metrics founders are obsessed with, their customer acquisition strategies as well as which main factors played an important role in their growth.

Jose Rico, co-founder of Olaclick (FoodTech in Latam), the company that makes it easy for restaurants in LATAM to sell food directly to their customers by creating a digital menu, promoting it in one click, and starting receiving food orders.

Deepankar Rustagi, CEO and founder of Omnibiz (Supply Chain in Africa), who bridges gaps in B2B FMCG trade by digitizing the key stakeholders in Africa.

Tracking metrics is important, but customers are still the key.As a startup, we pay close attention to our customer acquisition. Over the past year, we have seen significant growth in this area. We grew from 25,000 active customers as of April 2021, to over 80,000 in April 2022. We have grown ten times in terms of the topline and expanded our reach across the nation by launching in eight new cities in Nigeria.” mentioned Deepankar, CEO and founder of Omnibiz.

Baubap has also been acquiring more customers than ever before. Just in the last 12 months their customer acquisition grew ten times and is now over thirty thousand new customers per month. All of that with an amazing 7:1 CAC:LTV ratio. You might think that's remarkable growth in itself, but the metrics that ladder up to this outcome is what matters most day-to-day. These four KPIs currently drive their growth and are used to monitor the performance of their acquisition and retention funnels:

  • New customers
  • Loan origination
  • Default rate
  • Net revenue

All of these are tracked daily, weekly and monthly.

Similar funnel-shaped thinking is helping Jose and his team at Olaclick become more efficient in the onboarding customer journey per channel. They have been working with different tools and experimenting with channels, country segmentation, ordering process, and devices. The metrics they are keeping an eye on are activation rate, CAC and CAC of high value users.

Customer Acquisition Strategies: Which do you use and do they change over time?

One year ago Olaclick had two channels and now they have grown to more than eight. Their main goal is to experiment, experiment, experiment. Every time they start a new channel they define objectives and premises, and later revisit to see if they want to spend more time on it.

For Baubap it is a combination of scaling the already working channels and developing new ones. Six months ago they built a referral program allowing customers to earn cash by referring new customers to them, no strings attached. It quickly caught on and became their number one acquisition channel and at a low controlled CAC. To this day, it represents 25% of their new customer acquisition and some previous customers have made thousands of dollars through the program.

Tracking and re-evaluating metrics on a regular basis is important, which is how the Omnibiz team realized they needed to switch up their growth strategy. They increased their retailer contact points and doubled their digital acquisition metrics, as well as launched an associate sales channel to help boost their acquisition. Getting back to experiments, Omnibiz also started providing credit services with the buy now pay later Buy Now Pay Later model for their customers to help them scale their businesses while also retaining acquired customers.

What was most impactful in unlocking growth?

Growth mindset and experimentation: Roberto and the whole Baubap team have been embracing a growth mindset and methodologies for a long time now. They experiment a lot, both failing and learning as well as systematizing whatever works. This includes initiatives in automation, funnel optimization, customer feedback, and liaising with their support team. They strongly believe that whoever experiments the most wins. This has allowed them to scale the business, their team’s capabilities and product roadmap. The guidance for these learnings and results is translated directly into their four main KPIs. What’s more, is that every single Baubap team member can tell you these by heart. .

Team and measurement: Jose from Olaclick mentioned that team is key. Giving the responsibility to certain team members gives them ownership and motivation to get better results every week. For optimal results they combine ownership with clearly setting KPIs and measuring where do you start, where do you want to get and how much time are you going to take to make it happen.

Collective knowledge and automation: Omnibiz is a team of experienced individuals from the e-commerce, logistics and FMCG industries. With their collective knowledge, they have been able to build a leading African B2B e-commerce company. Obsessed with process refinement, they operate a true asset-light, app-driven digital model on all fronts, from inventory to salesforce and logistics. As an example, they recently launched a fully automated payments and reconciliation process to streamline financial tasks.

What should founding teams do to sustainably grow?

Step #1: Hire the right people with relevant skill sets and experience. This is a superpower that cannot be overemphasized. While you may have the idea and technical know-how to do business, it is very important to have the backing of team members who understand the goal, needs and industry that you are in. Also, to attain sustainable growth, do not stop researching your industry. “While it may be tempting to assume that you have gotten to the “market leader” stage, you must invest your time and efforts in researching the industry and taking informed experiments based on the research. This has helped us to improve our acquisition strategies over the last year and I strongly recommend this for startups.” said Deepankar, founder of Omnibiz in Africa.

Step #2: Systematize yours and your team's mindset around growth. Take risks, make fast decisions, learn as fast as possible by gathering live information and data, iterate and never feel comfortable with the status quo. This is not about isolated efforts or even a set methodology, it is about believing to your core, growing is your only choice as a leader, founder, team member, and company. “He who is not busy being born is busy dying.” quoted Bob Dylan’s song Roberto Salcedo from Baubap.

Step #3: Invest your time on the channels that work for you.Just because everybody does a certain channel now doesn't mean that it will work for you. How to know if it works? Measurement, measurement, measurement. Based on the data, make the right decisions.” emphasized Jose, co-founder of Olaclick.

To sum up

Adopting a growth mindset and implementing the right strategy at the right time is no simple task. However, it is vital for a startup to get right. Being able to grow sustainably is, ultimately, what makes or breaks a young business. Regrettably, there is no broadly applicable formula but, we can find our own recipe by learning which ingredients to use when from experienced entrepreneurs and a support network of mentors and peers.

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