Entrepreneurs are constantly told that to scale their businesses they need to hook up with the nearest VC or angel, pronto. I swear, 80% of the material I read on popular entrepreneurship blogs is about how to court and close investors.
That's why I love guys like Cameron Laker, CEO and Co-Founder of The Mindfield Group. They connect hourly frontline workers with big retail companies like Mr. Lube, COBS Bread and Mark’s Work Warehouse. He's gone from 0 - 100 employees in less than a few years. The kicker? He's done it without any outside investors.
On the Inflection Point Podcast Cameron shares the story of how they structured the business, and their deals with customers, so they wouldn't have to. Mindfield charges for the set-up of big retail clients and fulfillment of hourly workers. So they receive revenue at all points of their work. Then Cameron reinvests that revenue back into the company to fuel growth.
Relentless focus on a niche has only accelerated this growth. Cameron says "We were looking at companies who were spending $100k's on traditional recruiting agencies and by developing a technology platform that saves a lot of time when hiring 1000's of workers we just delivered [clients] a better mouse trap." That allowed him to stand out from his recruiting agency peers. Who typically focus on placing for 1 or 2 highly specialized positions in a company, like programmers or financial positions like a Comptroller. Plus, Cameron doesn't have to rely on the lumpy revenue of success fees only when a candidate is placed, like those traditional recruiting agencies.
"Niche" is a funny word to use here. Cameron laughed "We're told we've got a great little niche here. The reality is 70% of jobs in North America are hourly rate jobs. It is the biggest segment of job search."
One of the biggest surprises in the interview was one of the secrets of Mindfield's success wasn't having a Grade A VC on the board making customer introductions and providing capital. It was actually solving a problem and doing what you say you are going to do. "The problem my customers want solved - because they don't care about software features or if it's in the cloud - is they need a hire quickly...We own that result, that's the secret to our success."
Need more evidence you don't need that venture money to scale your company? Most of that press celebrating the latest funding round for that hot startup means bumpkis in the long run. Those are companies built just to raise more money, not actually provide a service or product.
Gary Vaynerchuk, CEO of 600+ person digital agency Vaynermedia, said recently of most funded entrepreneurs he interacts with, "None of these people actually built a business. They built a financial arbitrage machine...[Their companies] are built to make the next funding round happen...so they could eventually be bought. These startups aren't businesses, they're machines built to raise more money." (14:29 mark here)
So how can we as Entrepreneurs be more like Cameron?
For more on Cameron check out his Inflection Point Podcast interview. Every week they present the real story behind the growth of a 100+ person company, straight from the CEO. It's the mindset, tips, techniques and sometimes pure luck needed to grow a big business.