business growth matrix in the digital age

INFOGRAPHIC: Business Growth Matrix For The Digital Age

by Waju
Less than 10 years ago, a 7-figure business being run from home was unimaginable. Today there are thousands of 7-figure home-based businesses in Nigeria —a good part of these run by young and middle-aged people who have never written a job application in their entire lives.


The message is very clear to even the most thick-skulled traditional business enterprise. People are no longer depending on “capital” to start and run a successful business. The real economy at play today is the List Economy –the economy of audiences. People like Linda Ikeji who bought a home last year for a price that got tongues wagging started with nothing but a PC about a decade ago. Seun Osewa of Nairaland has an audience of almost 2million Nigerians with an estimated daily income of N1,000,000.

But while the number of online ventures has dramatically increased during the past decade, the size of the average online business has not changed. Studies show that 95% of online businesses earn less than $1,000 per year.

The average online business in Nigeria has an audience of 117 regular participants in their email list. The “average” here refers to the point at which half the businesses are smaller and the other half are larger.

My studies estimate that smaller online businesses in Nigeria draw only 5% of the buying audience. Meanwhile, half of all online users or buyers flock to the largest 10 percent of online businesses, which includes online entrepreneurs with 350 or more regular participants.

It is safe to say therefore, that 90 percent of online businesses in Nigeria have fewer than 350 audience population.

The encouraging news is businesses of all sizes achieve their purposes, which is mostly to educate, mentor or train their audiences.

In this post, I will spotlight five categories of online businesses, ranging in size from 250 to almost 20,000.

“There is no ‘best size’ for an email list” says Padebi Ojomo, founder of 7figurecourses.com.ng. “Each size category has its own challenges and also many opportunities for impact that other list size categories sizes cannot undertake effectively. By each supplying its own part, both the small and the big list can fulfil the huge void that formal education leaves with the Nigerian youth”

Padebi Ojomo, 7 FigureCourses.com.ng
Padebi Ojomo, CEO, Biz Savvy Chick Academy
Padebi herself founded her own online coaching business while caring for her newborn in the hospital intensive care unit about 6 years ago amid tubes and the whirr of machines fighting to keep the infant alive.


She survived -as did Padebi's business idea.

The beauty of it all is that these success stories and statistics of these, combined with relevant trends and important findings, will spark up significant conversations among business leaders, learning institutions, SMEDAN, State Governments and other regulatory authorities to generate deeper-level understanding of the future of business, and motivate everyone to dream together of future possibilities for greater economic impact.

I believe that the most useful way to group businesses is to group them by list/audience size. Doing this reveals more helpful information for effective benchmarking and feedback than looking at their niches, location, or any of the other numerous methods of comparison.

What I have seen is that in every single niche, there are the leaders and the stragglers.

Grouping by list size has value for small- and medium-size business leaders attempting to gain a better traction of the leadership and organizational shifts necessary to grow past size barriers.

It is on this premise that I have developed the “Business Growth Matrix” (see chart, below) to highlight the transitions that take place as a business continues to grow beyond specific size points.
infographic business growth matrix for the digital age
The Business Growth Matrix explores five types of organizational change that take place as a business grows in the digital age, including: audience size, orientation, structure, the founder’s role, and culture.

The Business Growth Matrix identifies six size categories of businesses, four of which are profiled in this and the following two issues.

Perhaps, the most critical reason for entrepreneurial leadership mistakes is blindness to the significance of list size.

List size has an enormous impact on how a business functions.

Up close, and with trained eyes, it becomes obvious that ‘size culture’ affects how decisions are made, how relationships flow, how effectiveness is evaluated, and what founders/owners, staff, and managers do.

A large business is not simply a bigger version of a small one.

Orientation

Every business has a central organizing principle or orientation. The small list size is driven by a family or relational orientation, with high value placed on the founder knowing every single one subscriber by name. Often these businesses are comprised of one or two extended families that play a key advisory/technical role for the business.

Advantages like these are what downplay the overhyped “need for capital” that traditional businesses exhibit. Capital becomes insignificant when starting an online business.

In fact, Medical Doctor, Entrepreneur and founder of Port-Harcourt based Snappi Labs, Ifiok Nkem, says “It is statistically advisable to NOT have too much money when starting your online business. Ifiok generated N160,000,000 in 5 days in November, 2016 selling a tiny software that lets people build mobile apps without any coding/programming knowledge.
nkem-and-akin-alabi
Photo: Nkem with Otunba Akin Alabi, founder of NairaBet.com (a Giga-Business) at WebX Conference 2014.
As the online business grows and the possibility of knowing everyone decreases, a medium-sized e-business begins to function as a collection of businesses with several product groups or teams.

Systems (called Funnels in the trade) begin to take precedence over what is acceptable to the just any one with a whim, and the order is a very strong catalyst for growth.

As a business reaches the large-sized phase, it is critical that another shift be made to an organizational orientation where there are additional structures and more organized group life.

The emerging megabusiness can function like an oversized large business or begin to function in such a way as to truly become an emerging megabusiness; this grouping of businesses, therefore receives the classification of having a hybrid orientation.

Depending on the philosophy or previous exposure of the leadership, the emerging megabusiness can either maintain the same menu of product groups, or it can once again explore new structures to spur continued growth.

Upon reaching the megabusiness level, the mindset begins to shift to resemble that of a corporation where the bottom line drives more decisions and the number of relational entry points is simplified and clearly defined, and people are guided into specific environments.

At last, the entrepreneur suddenly has the mindspace to invest in Automation.

If a business reaches the gigabiz level (10,000 or more in weekly emails), then based on sheer size, its orientation assumes that of a mini-religion or even cult-following, and often the by-products include specialized conferences (eg, Russell Brunson’s Funnel Hacking Live!), self-published trainings and books, and other resources that support and reinforce the brand or flavor of that particular business.

It seems to me that this growth is compulsory, but not enforced.

I say this because if a business does not make the appropriate and required adjustments, then it will either plateau for a time, or decline back to the previous smaller-size category.

The pull downward is stronger than the pull upward. Its called attrition. Grow -or die.

Structure

Lets visualize the small online business as a “single kiosk”. Most times, the single kiosk small business is internally focused on meeting the needs and concerns of those who are already in the circle.

When a small business experiences growth, the single kiosk is stretched as it becomes a medium-sized business.

The medium business is comparable to when my Dad bounced me from sleeping in my Mum’s bed, after my baby sister’s birth

What happens is that the small e-business has come of age to be called a medium size e-business. but the mindset required to run a mid-sized business is not yet installed.

The multiple cells of a large business set it apart from a medium business. In a large business, most subscribers are involved in a mix of multiple touchpoints, with most having little or no contact with one another. The focus often includes a balance between the external and internal, and new leads find quicker, easier entry points into funnel.

Also, the leadership is representative of multiple product groups within the business.

The emerging megabusiness continues to expand as it focuses on multiplying product groups and service options available in an effort to meet everyone’s needs.

Oftentimes, the strategy of emerging megabusinesses becomes somewhat fragmented or diffused as it tries to mirror existing megabusinesses rather than creating the new functional structures that best fit its inherent strengths.

Megabusinesses best achieve a simplified structure as they work to redefine their business strategy and sharpen it intentionally in just a few directions for future growth.

Finally, the structure of the gigabiz is often best reflected by multiple events.

Gigabusinesses are still the primary drivers behind the multi-event movement, and now online webinars have opened a new platform for even greater impact.

BOTTOMLINE:

The reality is the more product groups your business has per 100 in audience, the better cared for subscribers are, and the faster your business will grow.

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