Today marks Sweav’s second birthday🎉 Time for reflection.
2023 was a very ‘fertile’ year as personally, we both welcomed a newborn baby in our respective families, and our ‘crawling Sweav baby’ developed into a serious business. Regardless of sleepless nights, diaper explosions and a little market headwind, we went ‘4x’ in revenue and ‘1.5x’ in members.
In addition, we organized several events and moved to a new office to strengthen our growing community of 220 members, achieved a near perfect client satisfaction and last but not least: achieved ‘product market fit’.
Despite these achievements, it was a year of ‘vallen en opstaan’. Here are our three main lessons.
FYI: If you're interested in our lessons from year 1, read them here.
Lesson 1: Find out who you are, and stick with it
As management consultants, we grew up professionally during a time where money was in abundance, venture capital fueled hypergrowth, unicorns were the golden standard and every new company was a ‘tech company’.
At Sweav, we reached our product market fit through a lot of experimenting. Once we found the ‘ideal’ way to match demand (clients) with supply (members), the question was: how quickly can we scale?
The answer turned out to be… not that quickly when you compare it to the conventional ideology of scaling a start-up. Even though Sweav’s operating model and interface with its members is fully ‘tech enabled’, it’s not a tech business.
Sweav’s growth is based upon relationships and an increasingly trusted brand. Our clients are decision makers high up the ranks within SMEs, private equity firms and corporates. To gain their trust, we need a ‘warm’ personal connection, build credibility and deliver the highest quality standard. This takes time, and as we become quite profitable quickly, doesn’t require external (VC) financing. It's also the model that fits us best personally, as we get energy from building an engaged community of members and clients vs. a transactional tech platform.
Our biggest learning is that you shouldn’t follow the market trends or do what everyone else does, but find out what really drives your business and go with what fits you best. So, find out who you are, and stick with it. For our business, a more moderate growth path fueled by trust, building a brand and making the market in a niche that is still small is the way to go.
Lesson 2: Stop fishing in the wrong pond
Initially we were fishing in the wrong client pond, thinking everybody in the corporate and investor world could be our client. We were very wrong.
It took us a long time to find our ideal clients and to learn how we could best reach them. We tried everything from warm outreaches and cold acquisition to online marketing and radio campaigns on BNR. By trial and error, we learned that our ideal customer is part of a super specific market segment.
In retrospect, our ideal clients were there from the start as our early adopters. They are early adopters for a reason. If we would have really examined their specific characteristics earlier, and targeted potential clients with similar characteristics from the beginning, we would have grown faster sooner.
The same goes for our members. Sweav is not a community for everyone. We found out that specific members that hit the project ball out of the park over and over again, have very specific characteristics. For example, in addition to their background in strategy or M&A, they are eager and have the fire within them to fix stuff, whatever it is. For these types of characteristics we now test much more thoroughly before we welcome someone to Sweav.
Getting this right results in a snowball effect. Positive referrals and a warm network of both happy clients and happy members result in word of mouth which leads to further growth.
Lesson 3: Embrace the grind and take some risks
Coming from the management consulting world, we were surrounded with very well-behaved and super risk averse people who think that having a high IQ and saying smart things is the key to success. In our second year building Sweav, we learned however that when building stuff it's much more important to grind and take some (calculated) risk every once in a while.
We stopped doing projects as freelance strategy consultants ourselves meaning we gave up on regular income and financial security. We did some unconventional investments in a year of recession, like a big-budget office at a triple A location, hiring employees and doing an expensive campaign on national radio. We may have sent direct cold emails to partners of private equity firms or bluntly asked connections for an introduction with a potential client. Sometimes we get push back and an indignant reply. But as long as it doesn't happen too often, we don’t mind.
Also, there are many times when running a start-up is just not that exciting. Doing reach outs to clients repeating the same story for the 100th time, fixing an invoicing system that doesn’t work, extending employee labor contracts, you name it.
But as does with everything: things add up over time. So as long as we continue doing stuff a bit better than the week before and take some uncomfortable risks every once in a while, we believe we can keep growing.
Looking forward to 2024
We are very optimistic about 2024. Now we understand what to focus on, we are confident that 2024 will be a year of further accelerated growth. Two of our more exciting goals are to experiment with expanding both in categories (such as legal) and internationally (like the UK) and further recruit full time employees to boost execution firepower.
To anyone who’s thinking about starting a startup, we’d say: go for it! We know startup life isn’t for everyone, but if you are very excited about a business idea, give it a try. At worst, you’ll make as many mistakes as we did. Good luck!